Health, Life Insurance Stocks Rally as GST Waiver Proposal Gains Momentum

Insurance stocks witnessed strong momentum on Thursday, August 21, after reports suggested that health and life insurance premiums may soon get relief from the existing 18% Goods and Services Tax (GST).

The GST Group of Ministers (GoM) has recommended that health and life insurance policies purchased by individuals be exempt from GST. The move is aimed at making insurance products more affordable and increasing penetration in India’s underinsured market.

Key Proposal and Concerns

Bihar Deputy CM and convener of the insurance GoM, Samrat Choudhary, stated that the final call will be taken by the GST Council after wider consultations with states. However, some states have raised concerns about the potential revenue loss if GST is waived on insurance products.

Also Read: Elon Musk Pauses Plans for ‘America Party’

Market Update

The market reacted positively to the development. At 9:20 a.m., shares of SBI Life, HDFC Life, LIC, ICICI Lombard, and ICICI Prudential were trading with gains between 1–2%, signaling optimism from investors.

Market Insights

• A GST waiver is seen as a big boost for insurance demand, as it could make policies more attractive to individuals.

• The exemption may also help increase long-term insurance penetration, a critical gap in India’s financial security landscape.

• On the flip side, states’ hesitation over revenue loss indicates that negotiations in the GST Council could be challenging before the proposal is finalized.

If approved, this could mark a significant reform in the insurance sector, improving accessibility while giving a fresh push to insurance stocks in the near term.

Click here to explore:NiftyTrader