High-value insurance policies experienced muted growth in the first six months of the current financial year after the Centre decided to tax such products in this year’s Budget. Simultaneously, there has been a marked improvement in the growth of policies with premiums of ‘less than Rs 5 lakh’, mainly originating from smaller cities.
During this year’s Budget, Finance Minister Nirmala Sitharaman proposed that insurance policies (excluding unit linked insurance plans or ULIPs) with an aggregate premium exceeding Rs 5 lakh, and the maturity amount, would not be exempt from tax. This rule came into effect on April 1, 2023.
Speaking at the after-earnings analyst meeting, Niraj Shah, executive director and chief financial officer (CFO) of HDFC Life Insurance, said, “The