‘GST amortisation on distribution costs to aid life insurers’

Life insurers have urged the government and the regulator to allow amortisation of distribution costs to offset the impact of GST rate cut on life policies.

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Insurance Awareness Committee Chairperson Kamlesh Rao tells Narayanan V about the GST impact, the ‘Sabse Pehle Life Insurance’ campaign, and other industry issues. Excerpts: What’s the status of the ‘Sabse Pehle Life Insurance’ campaign?

The Life Insurance Council started this campaign with a commitment from all the life insurance companies to run it consistently for at least three years. Our research shows that awareness of life insurance is nota problem. The bigger challenge is converting this awareness into consideration. So, our campaign now focuses on product categories like term, savings,and retirement. Wealso talk about child plans because research shows that children’s financial planning is the second-highest priority for consumers. The first phase of the campaign is nearing its end.Normally, the second phase would have begun around December or January. But with the government making the GST on life insurance zero, we are evaluating if this is the right time to highlight the benefits to customers. The GST rate cut has given new talking points to distributors. Mysense is the renewed vigor in distribution will help them reach out to more people, prospecting will rise, and if throughput is managed well, the industry will immensely benefit.

But the industry still has concerns over input tax credit (ITC).