Renewal of life insurers' policies, after 1 year, declines in June quarter

Persistency is the proportion of life insurance business renewed from the business underwritten. The ratio is measured in terms of number of policies and premiums underwritten

The 13th-month persistency rate of life insurers — an important metric indicating the retention of new policies — declined in the first quarter of 2025-26 (Q1FY26). This fall was primarily driven by a lower share of high-value policies, following taxation changes implemented in April 2023.

 

In February 2023, the government decided to tax income from traditional insurance policies, other than unit-linked products (ULIPs), having premiums above ₹5 lakh in a year to plug the arbitrage.

 

High-net-worth individuals (HNIs) were using this to get tax-free returns on their high-value insurance policies through Section 10(10D).

 

Under Section 10 (10D), individuals can avail