Growth in number of life insurance policies sold falls steeply in FY25

The growth in the number of life insurance policies sold dropped 7.39 per cent Year-on-Year (YoY) to 2.70 crore in FY25 from 2.92 crore in FY24. The individual non-single premium growth dropped 8.01 per cent YoY to 2.57 crore. Individual single premium policies in the year grew by 6.4 per cent YoY to 13.4 lakh. The growth in group single premium in the year fell by 24.11 per cent YoY as against 37.35 per cent YoY to 3300. The group non single premium 3.58 per cent YoY to 5552 and the group yearly renewable premium by 13.29 per cent YoY 32639. 

The number of policies sold by LIC dropped by 12.80 per cent YoY to 1.78 crore as against a slippage of 0.17 per cent YoY in FY24. While, private insurers recorded 5.19 per cent YoY uptick to 92.5 lakh in FY25 as compared to 9.19 per cent YoY in FY24. 

According to analysts at CareEdge, "The significant decline in the number of policies sold can be attributed to the implementation of new surrender value norms, which took effect in October 2024. Private players seem to have adapted to the revised surrender value regulations as they have increased the volume and value of individual non-single policies. Meanwhile, insurers have focused on selling higher-value policies, which has helped mitigate the impact on premium income; however, the policy mix will impact margins."