High-value life insurance policy sales fail to pick up in Feb-March

This is despite a new tax being introduced from April 1

Life insurers have so far not seen any serious pick up in high-value non-par policy sales after the Centre decided to tax proceeds of such policies sold from April 1, 2023. 

Experts had predicted a sales pick up before the tax regime came into effect.

The policy was announced in the Budget, wherein the government said it will tax proceeds from high-value life insurance policies (non-ULIPs).

This move may help plug the arbitrage that high-net-worth individuals (HNIs) use to get tax-free returns on their insurance policies through Section 10(10D) of the Income-Tax Act.

Following the Budget announcement, analysts at various