Center’s shock to LIC huge reduction in new premium collection
New Delhi: The blow of Union Finance Minister’s budget proposals fell hard on Life Insurance Corporation (LIC). The company saw a huge drop in new premium collections. LIC New Business Premium (NBP) has been reduced by 50.41 percent in April 2023 to Rs. 5,810 crores as stated in an English magazine article. LIC’s new premium income has halved especially as sales of single premium policies have declined. Business done through new policies sold every year is called NBP. The entire life insurance industry saw a decline of 30 percent in the month of April compared to the previous month after the end of NBP.
However, private life insurance companies managed to grow by 8.5 percent. From the financial year 2023-24 Rs. It is known that Finance Minister Nirmala Sitharaman has proposed to levy income tax on insurance premium payments above 5 lakhs in the latest budget. Also, the budget introduced by Sitharaman has hit the LIC’s income by shifting employees towards a new tax system that does not have any tax deductions for investments made in various insurance schemes. While tax on policies above Rs.5 lakhs has deterred people from taking large policies, those who take policies to save tax through Section 80C of the IT Act have also stepped back.
In the month of April, LIC Group’s single premium income fell by 65.76 percent to Rs 2,899.63 crore. Individual single premium collections declined by 23 percent to Rs 1,014.47 crore. However, while the group single premium of private life insurance companies increased by 15 percent, their group non-single premium collection declined by 50.47 percent. While SBI Life Insurance new business premium increased by 8 percent, group single premium decreased by 11.4 percent and group non-single premium by 59 percent.
