Insurance Stocks Rally: LIC, HDFC Life, SBI Life Surge up to 10% After GST Exemption On Insurance Policies

Insurance shares jumped sharply in Thursday’s morning trade after the GST Council exempted individual life and health insurance policies from GST.

• LIC share price rose over 5%, touching ₹914.9.
• SBI share price Life hit ₹1,899.
• HDFC Life share price climbed to ₹814.9.
• Niva Bupa share price surged more than 10% to ₹91.39.

This rally reflects strong investor sentiment after the tax relief.

GST Council’s Decision

Earlier, insurance policies carried taxes such as:

• Health, ULIP, and Term Life Insurance – 18%
• Endowment (First Premium) – 4.5%
• Endowment (Regular Premium) – 2.25%
• Single Premium Annuity – 1.8%

From September 22, 2025, these taxes will no longer apply. GST on reinsurance costs has also been removed, boosting the outlook for the sector.

Double Challenge for Insurers

While customers benefit, insurers face higher costs:

• With GST removed, they cannot claim Input Tax Credit (ITC).
• This raises operating costs by 5–7% per policy.
• Most individual policies are not reinsured, limiting the benefit of the reinsurance exemption.

Read More: GST New Rates: GoM Proposes 18% GST on Premium EV Cars!

Conclusion

The removal of GST on life and health insurance policies has triggered a strong rally in insurance stocks like LIC, HDFC Life, SBI Life, and Niva Bupa. 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

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