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Mumbai: In the first month of the current financial year, the income from the new business plan premium of the Life Insurance Corporation has decreased by 50 percent year-on-year. Compared to April 2022, the income from new business premium has decreased to Rs 5810.10 crore in the month of April of the current year.
New business is being affected by the removal of tax benefits on life insurance products with higher premiums from the current financial year.
Statistics show that there is a 30 per cent variation in new business premium income of the entire life insurance industry.
Despite the industry’s demand that life insurance products are not luxury products, they should get tax benefits, the proposal to levy maturity tax on insurance products worth more than five lakh rupees has been implemented from the current financial year.
Industry sources said the new norm is reducing the attractiveness of high-cost life insurance products. Insurance business is generally sluggish in the initial months of the financial year and the later period sees buying of insurance products to avail tax relief.
Sources further said that in view of the new tax rules from the current year, the sale of high premium insurance products will be affected.
The premium received through a new policy during a year is known as New Business Premium.
Meanwhile, LIC’s share price has seen a drop of forty percent after one year of listing. LIC’s share is currently trading around its share price of Rs 949 to Rs 565.
