The life insurance industry reported a three-fold jump in growth, with new business premium (NBP) rising 16% year-on-year to a record ₹4.60 lakh crore in FY26. The growth was primarily driven by the Goods and Services Tax (GST) rate cut from 18% to nil on individual life insurance policies, which triggered strong demand, particularly for pure protection products like as term insurance.
FY26 also marks a return to double-digit growth after two consecutive years of subdued expansion, when the industry had posted 5% and 2% growth, respectively.
Life Insurance Corporation (LIC), the country’s largest life insurer, reported a 15% year-on-year increase in new business premium to ₹2.60 lakh crore. In comparison, the 26-member private life insurance industry grew at a slightly faster pace of 17% to ₹1.99 lakh crore. LIC continued to account for 57% of the total industry premium, with private insurers holding the remaining 43%.
The business mix, however, remains sharply different. Group insurance accounted for 74% of LIC’s total new business premium, with the balance coming from retail policies. For private insurers, the mix is tilted towards retail, which contributed 59% of their total new business premium.
Industry’s ever monthly performance recorded in march 2026
The industry also recorded its best-ever monthly performance in March, with new business premiums rising 17% year-on-year to ₹43,310 crore. Prior to this, the industry reported its strongest growth in December 2025, when premiums had grown nearly 40% to ₹42,150.77 crore. Life Insurers’ growth momentum picked up in the second half of the fiscal following the GST exemption on individual life insurance policies including term, endowment, ULIPs, and riders, which came into effect on September 22, 2025.
“Retail protection was a clear highlight, growing 43%, supported by lower pricing post the GST rate cut and a strengthened product portfolio. In H2FY26, pure retail protection grew by 57%, and overall sum assured increased by 28%, indicating stronger traction in pure protection,” Vibha Padalkar, MD & CEO, HDFC Life Insurance, told FE during an interaction.
Among major private players, SBI Life Insurance, the largest private insurer by premium, reported a 20% year-on-year increase in new business premiums to ₹42,550.26 crore. in the fiscal year 2025-26. HDFC Life Insurance posted a 9% growth to ₹36,646.40 crore, while ICICI Prudential Life Insurance saw a 10% rise to ₹24,809.68 crore.
In terms of volumes, life insurers sold a total of 28.33 million policies during the fiscal, up from 27.06 million policies in FY25.
