‘Women buying more life insurance policies than men’:Premium reduction post Centre’s GST rate cut changing way people buy policies

When the Central Government removed the Goods and Services Tax (GST) on individual term life insurance, it did more than just reducing premium prices—it changed how people buy financial protection. According to a new report by Policybazaar, term insurance adoption grew by 1.5 times or 150% after the GST reform. Lower policy costs have encouraged buyers across income groups to increase their policy amounts, add extra safety features like riders, and buy insurance at a younger age. Women, Homemakers, and Young Adults Lead the Surge The GST exemption has made term insurance accessible to new consumer groups who previously stayed away from individual policies: Women Buyers: Purchases by women grew 27% faster than purchases by men. Homemakers: The homemaker segment recorded a 60% surge in adoption compared to other groups, showing that families increasingly recognize the financial value of homemakers. Young Buyers (18–25 Years): The youngest age bracket grew 20% faster than all other age groups. Young professionals are locking in lower premiums early in their working lives. Self-Employed Professionals: Purchases among business owners and freelancers grew 12% faster than salaried segments, helping them create safety nets without relying on employer cover. HNIs and NRIs Choose Bigger Covers Lower premiums have created extra budget space for affluent buyers to upgrade their safety nets. High-Net-Worth Individuals (HNIs) and Non-Resident Indians (NRIs) are leading the shift toward higher insurance covers: ₹3 Crore+ Covers: The share of ₹3 crore-plus policies rose by 35% among NRIs and 32% among HNIs post-GST. Adding Extra Protection (Riders): Rider adoption grew by 15% among NRIs and 9% among HNIs. Across the wider market, more than half (50%) of all purchases are now for covers of ₹1 crore and above, while policies worth ₹2 crore and above maintain a steady 15% market share. How many people in India have insurance? IRDAI reports around 30 to 33 crore (300–330 million) active individual life insurance policies in force. Against a total population of 1.4 billion or 140 crore, this represents a raw policy count equivalent to about 21% to 23% of the population. PIB states that insurance penetration stands at 3.7% with life insurance at 2.7% and non-life at 1%. More Buyers Are Adding Extra Policy Features Instead of keeping basic insurance, buyers are using their savings from the GST cut to add policy riders. Overall rider adoption increased by 13%, led by two major add-ons: Accidental Death Benefit (ADB): Pays extra money to the family in case of fatal accidents. Waiver of Premium (WOP): Keeps the policy active without future premium payments if the policyholder faces disability or critical illness. Regional Growth Champions The affordability boost from GST relief extended beyond metro cities. Comparing data between FY25 and FY26, the strongest growth in adoption occurred in: Andhra Pradesh Telangana: +39% growth Kerala: +11% growth Maharashtra: +10% growth Expert Perspective: Commenting on the market shift, Varun Agarwal, Head of Term Insurance at Policybazaar, explained that the tax relief has fundamentally changed consumer behavior: “The GST exemption on individual term life insurance has had an impact that goes beyond simply reducing the premium customers pay. What we are seeing is a fundamental shift in how consumers are approaching protection. Customers are using the affordability benefit to reassess their protection needs, opt for higher sum assured and add riders to create more comprehensive coverage.This shift is particularly visible among HNIs and NRIs, where we are seeing stronger traction for covers of ₹3 crore and above. At the same time, term insurance adoption is broadening among women, homemakers and self-employed individuals, while younger consumers are starting their protection journey earlier. As affordability improves, the opportunity is to move the conversation from simply buying term insurance to buying adequate term insurance.”