ULIPs dominate private insurers' FY26 product mix despite protection push

Private life insurers continued to depend heavily on ULIPs in FY26, although protection products gained momentum after GST exemption and rising customer demand for life cover

India’s leading private life insurers continued to rely heavily on unit-linked insurance plans (ULIPs) in FY26, even as protection products gained momentum following the Goods and Services Tax (GST) exemption on individual life insurance policies and weaker equity markets in the fourth quarter (Q4FY26).

 

According to investor presentations and analyst calls, ULIPs remained the dominant product category across major private insurers, while protection products continued to account for a relatively small share of annualised premium equivalent (APE).

 

Why are insurers being urged to focus on protection products?

 

Speaking at a Federation of Indian Chambers of Commerce and Industry (Ficci) event on Wednesday, Ashwini Tewari, managing director (corporate banking and subsidiaries) at State Bank of India (SBI), said insurers should prioritise protection products over market-linked offerings.

 

“In my view, the first task of an insurance company should always be to sell protection. But protection, unfortunately, accounts for just 10 per cent of the industry share,” Tewari said, adding that he had often told SBI Life Insurance that selling ULIPs was “not a good idea” from an insurer’s perspective.

 

Despite softer equity markets affecting ULIP performance in Q4 FY26, ULIPs continued to dominate product mix, though insurers indicated a sharper focus on protection amid rising demand and GST-led pricing benefits.

 

How did private insurers perform across ULIPs and protection?

 

At SBI Life, ULIPs accounted for 60 per cent of APE in FY26, down from 64 per cent a year earlier, while protection products contributed 9 per cent. Protection APE grew 10 per cent year-on-year, with individual protection APE rising 24 per cent.

 

The insurer said pure protection recorded 122 per cent growth on an individual APE basis, while sum assured in the segment rose 62 per cent. It also reiterated plans to reduce dependence on ULIPs and expand protection business.

 

At HDFC Life Insurance Company, ULIPs formed nearly 44 per cent of individual APE in FY26, up from 39 per cent last year. Retail protection business grew 43 per cent year-on-year, with protection share in individual APE rising to 7 per cent from 5 per cent.

 

The insurer said lower pricing post-GST exemption and a stronger product portfolio supported protection growth, adding that customers could gradually rebalance towards long-term savings and protection products.

 

For ICICI Prudential Life Insurance, linked products remained the largest component of APE, though their share eased to 48 per cent from 49 per cent a year earlier. Protection mix increased 220 basis points year-on-year to 17.9 per cent.

 

How is GST exemption helping protection insurance demand?

 

The insurer said GST reforms had emerged as a key tailwind for retail protection products, helping improve customer traction and awareness.