Term insurance purchases rise 1.5X post-GST break, more buy riders: Report
Lower premiums appear to be prompting Indians to buy life insurance. After being exempted from goods and services tax (GST) in September 2025, term insurance purchases have grown about 1.5 times. Buyers are also opting for higher sum assured and additional riders, according to a Policybazaar report.
Bigger covers gain traction
The increase is particularly visible among affluent customers. The share of Non-Resident Indians (NRIs) buying term plans with a sum assured of Rs 3 crore or more rose 35 per cent after the GST reform, while the corresponding share among high-net-worth individuals (HNIs) increased 32 per cent. Rider adoption also increased among these groups, rising 15 per cent among NRIs and 9 per cent among HNIs.
A rider provides additional benefits on top of the base policy, usually for an additional premium.
The report suggests that lower premiums may have given customers more room to reassess how much life cover they need rather than simply buying the cheapest available policy.
For the broader customer base, Rs 1 crore-plus remains the most common level of cover. More than half of term insurance purchases are for Rs 1 crore or more, while policies offering Rs 2 crore or more account for 15 per cent of purchases.
Women and younger buyers drive wider adoption
The growth has also extended to segments that have traditionally had lower term insurance participation.
Women’s term insurance purchases grew 27 per cent faster than men’s in the post-GST period. The homemaker segment recorded 60 per cent additional growth compared with other customer segments.
This is significant because the financial contribution of a homemaker is not captured only through a salary. Household work, childcare and other responsibilities can carry a substantial economic value, and the report indicates that more families are factoring this into their protection decisions.
Younger buyers are also entering the market earlier. Term insurance adoption among those aged 18–25 grew 20 per cent faster than among other age groups. The 36–45 age group recorded the second-highest uptake.
For younger customers, buying cover early can also mean securing protection before changes in income, health or family responsibilities. However, the appropriate sum assured still depends on an individual’s income, liabilities and dependants rather than age alone.
Self-employed buyers see faster growth
The post-GST increase was not restricted to salaried customers. Purchases by self-employed individuals grew 12 per cent faster than those in other customer segments.
For business owners and self-employed professionals, income can be less predictable and employer-provided life insurance may not be available. Individual term insurance can therefore form a separate layer of family protection.
Riders become part of the protection mix
The change is also visible beyond the basic life cover. Rider adoption increased 13 per cent between the pre- and post-GST periods, led by the Accidental Death Benefit (ADB) and Waiver of Premium (WOP) riders.
Buyers therefore appear to be using some of the affordability benefits to broaden their protection rather than only reducing their insurance outgo.
That said, riders should be assessed separately for their coverage, exclusions and cost. A higher number of add-ons does not automatically mean better protection.
Growth extends beyond metros
The increase was also visible across different regions. Andhra Pradesh and Telangana recorded the strongest growth, with adoption up 39 per cent between FY25 and FY26. Kerala recorded 11 per cent growth, followed by Maharashtra at 10 per cent.
Varun Agarwal, head of term insurance at Policybazaar, said the GST exemption had encouraged customers to reassess their protection needs, increase the sum assured and add riders. He said the shift was particularly visible among HNIs and NRIs, while women, homemakers, self-employed customers and younger buyers were also showing stronger adoption.
