Union Budget 2026: Bajaj Life Insurance’s CEO calls for consistent policy support to position life insurance as key long-term savings

Despite strong economic growth, India remains underdeveloped in terms of the insured population. The insurance sector has witnessed rapid growth in the past few years with increased awareness, yet it faces structural headwinds continued to hold back the full potential of the growth. The 100% FDI in the insurance sector has paved the way for ample capital adequacy, and the removal of GST on individual insurance made it affordable and accessible across different strata of society.

ICRA projects the NBP to grow from ₹4.3 trillion and ₹4.6 trillion in FY26 and FY27, with a growth rate of 8.9% and 8.2%, respectively. The industry witnessed renewed demand since October as the removal of GST boosted the affordability of insurance products.

Tarun Chugh, Managing Director (MD) and Chief Executive Officer (CEO) of Bajaj Life Insurance, has called for stronger and more consistent policy support to position life insurance as a key long-term savings and retirement solution. He said recent measures, including the exemption of insurance premiums from GST, have created a strong base for growth. India’s insurance sector has made steady progress, but penetration and coverage gaps remain significant, particularly in retirement planning and rural protection.

He stated that aligning the tax treatment of insurance annuities with other pension instruments, such as taxing only the returns on annuity payouts and extending comparable deductions, would allow individuals to choose retirement products based on suitability rather than tax differences. Similarly, bringing parity in taxation between traditional and unit-linked life insurance policies can simplify the tax framework and encourage disciplined, long-term wealth creation alongside protection.

He stressed the importance of making insurance more affordable in rural and social segments. He said rationalising transaction costs, including stamp duty exemptions for low-ticket policies, could help expand access and deepen insurance penetration.