RESUME APPLICATION PAY PREMIUM
Fund Performance

Fund Performance

Knowledge Center

Knowledge Center

About Us

About Us

Tools and Calculators

Tools & Calculators

Quick links

Mobile (Download app)
  • Webpages
  • Documents
  • HDFC Life ClassicAssure PlusInvestment
  • HDFC Life ClassicAssure PlusInvestment
  • HDFC Life ClassicAssure PlusInvestment

For NRI Customers

(To Buy a Policy)

(If you're our existing customer)

For Online Policy Purchase

(New and Ongoing Applications)

Branch Locator

For Existing Customers

(Issued Policy)

Fund Performance Check

RESUME APPLICATION PAY PREMIUM

What do you want to do?

Quick links

Mobile (Download app)

Download HDFC Life App

Buy plans, track your policy, make renewal payments & monitor fund performance with HDFC Life App, Download Now!

Apple Logo Go to Google Play Store

How Life Insurance Industry has changed after Demonetization?

down-arrow
How Life Insurance Industry has changed after Demonetization?
November 08, 2016
 

The Prime Minister of India, Mr. Narendra Modi announced demonetization of INR 500 and INR 1000 notes on 8th November 2016. The move was expected to eliminate tax evasion by targeting black money. Numerous industries in the country were affected by demonetization, either positively or negatively.

Impact of demonetization on the life insurance industry

The life insurance industry, in particular, witnessed a huge impact due to demonetization. In the month of November 2016, life insurance providers saw a total first-year premium collection, which means premiums for new policies of INR 16,061 crore. This was a huge 113% approximate increase as compared to the same period a year ago. The Insurance Regulatory and Development Authority of India (IRDA), the statutory agency regulating the insurance industry in India also stated that this number was a 45% rise as compared to the preceding month in the same year.

The aforementioned figures indicate that demonetization has a positive impact on the insurance industry and has led to its growth. Following are three major implications of demonetization.

  1. Switch in investment options

    Traditionally, Indians chose to make investments in gold and real estate. Demonetization made these sectors less attractive. Individuals, therefore, began choosing life insurance products to park their savings. This, in turn, led to an exponential growth of the life insurance industry.

  2. High infusion of corpus

    Demonetization saw a huge infusion of cash in the life insurance industry. Out of a total of INR 12.44 trillion that entered in the formal system, a huge chunk was invested in the life insurance industry.

  3. Increase in cashless transactions

    Life insurance providers accept premium payment either through cash, cheques or over the Internet. Post the announcement of demonetization, insurance providers recorded a rise in the number of cash payments. However, this soon phased out. Many individuals began switching from cash payments to electronic means. This included making premium payment through National Electronic Funds Transfer (NEFT) and Electronic Clearance System (ECS). Given that demonetization was also aimed at increasing the use of digital methods in the country, the life insurance industry contributed largely towards this goal. Individuals are now using the Internet to browse insurance-related information. They are also using the insurer’s website to purchase their insurance plans. This is due to the numerous benefits offered by the online platform, namely availability of detailed information, convenience, flexibility, and customized solutions.

The life insurance industry is witnessing a positive trend as compared to last financial year (FY). FY 2016 recorded a total premium collection of around INR 1, 38,657 crore, while FY 2017 saw a total premium collection of INR 1, 75,023 crore approximately. This is around 26% increase as compared to FY 2016. Owing to the numerous benefits that life insurance plans have to offer, it is only expected that these numbers will continue to increase in near future.

Show Full Article
Hide Full Article

Term Plan Articles Term Plan Articles

Investment Articles Investment Articles

Savings Articles Savings Articles

Life Insurance Articles Life Insurance Articles

Tax Articles Tax Articles

Retirement Articles Retirement Articles

ULIP Articles ULIP Articles

Health Plans Articles Health Plans Articles

Child Plans Articles Child Plans Articles

Popular Calculators Popular Calculators

Francis Rodrigues Francis Rodrigues

Francis Rodrigues has a decade long experience in the insurance sector, and as SVP, E-Commerce and Digital Marketing, HDFC Life, manages the online sales channel, as well as digital and performance marketing. He has had hands-on experience in setting up sales channels and functional teams from scratch over a career spanning 2 decades.

LinkedIn profile
Author Profile Written By:
Vishal Subharwal Vishal Subharwal

Vishal Subharwal heads the Strategy, Marketing, E-Commerce, Digital Business & Sustainability initiatives at HDFC Life. He is responsible for crafting and ensuring successful implementation of the overall organisation strategy.

LinkedIn profile
Reviewed By Reviewed By:

Here's all you should know about life insurance.

We help you to make informed insurance decisions for a lifetime.

Blue Chip Fund

Blue Chip Fund

"Blue chip fund invests in stocks / shares of well-established companies with credible financial performance, market capitalization & steady payout of dividends."

Diversified Equity Mutual Funds

Insurance Overload: Are You Hoarding Policies Instead of Securing Your Future?

Single Premium Term Insurance: Meaning, Benefits & Types

Explore the details of a Single Premium Policy in term life insurance. This guide provides insights into its meaning, benefits, and types, offering a comprehensive overview.

Single Premium Term Insurance: Meaning, Benefits & Types
Important Reasons to Check Insurer's Claim Settlement Ratio Previous
Important Reasons to Check Insurer's Claim Settlement Ratio Next
HDFC life
HDFC life

HDFC Life

Reviewed by Life Insurance Experts

HDFC LIFE IS A TRUSTED LIFE INSURANCE PARTNER

We at HDFC Life are committed to offer innovative products and services that enable individuals live a ‘Life of Pride’. For over two decades we have been providing life insurance plans - protection, pension, savings, investment, annuity and health.

Popular Search

Popular Searches