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The festive season, coupled with the government's recent decision to make health insurance GST-free, has provided a strong boost to India's insurance market.
According to an analysis by Policybazaar, insurance payments between September 22 and October 14 grew 14 per cent week-on-week and 35 per cent year-on-year, driven by festive spending and consumer preference for flexible and digital payment modes. The analysis highlighted that the 0 per cent GST reform on health insurance and a surge in vehicle purchases during the Navratri-Diwali period acted as major catalysts for this growth. It stated "Between September 22 and October 14, insurance payments grew 14 per cent week-on-week and 35 per cent year-on-year, coinciding with the 0 per cent GST reform and early Navratri-Diwali spending". The festive period encouraged users to secure health, vehicle, and family protection policies ahead of the new financial year-end rush. Overall, payment volumes during the period rose 14.13 per cent week-on-week, while festive year-on-year growth stood at 35.38 per cent. The momentum was strongest across motor and two-wheeler insurance categories, which are closely linked to festive buying and new vehicle registrations. Policybazaar noted that Unified Payments Interface (UPI) emerged as the preferred payment mode across insurance categories, reflecting its growing role in transforming India's insurance payment ecosystem. UPI transactions surged 18 per cent post-September 22, becoming the top choice for both policy renewals and new purchases. Motor and two-wheeler policies rode the festive wave as new vehicle sales and Diwali gifting drove higher demand for insurance coverage. UPI transactions in these segments grew 17 per cent each, underscoring the rising need for speed and convenience at the point of purchase. The central government, after the GST rate rationalisation meeting, announced a GST exemption on all health and life insurance premiums. The new rule came into effect on September 22, 2025. The exemption was made to make health and life insurance policies more affordable for customers, as they will no longer need to pay GST on insurance premiums. Credit card usage also recorded a strong festive comeback, supported by banks offering festival-linked incentives and cashback offers. Meanwhile, monthly premium payment options and net banking modes gained traction among users opting for higher-value insurance policies. (ANI)
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