In the Budget 2023, certain proposals have been made for non-linked life insurance policies that will be sold after April 1, 2023, whereby it is proposed to tax income from insurance policies (other than ULIPs) having a premium or aggregate of premiums above Rs 5,00,000 in a year. Tax exemption of Section 10(10D) is proposed to continue for proceeds upon death. Max Life, in an exchange filing announced that the policies sold until March 31, 2023, are outside the scope of this proposal and do not impact those policies in any way.
Speaking on the specific proposal, Prashant Tripathy, CEO & MD of Max Life, said that “Max Life has a well-diversified product mix across products and customer segments, and our share of business from customers with the impacted non-unit linked policies with an annual premium of above Rs 5,00,000 is approximately ~9% of individual APE for 9M FY23 and was ~6% for FY22. We don’t expect this sale to completely disappear, as among many levers such as shifting to a lower ticket size and alternative products, we are confident of retaining a significant portion of the sale. In the budget of 2021, a similar exemption was withdrawn for ULIPs with ticket sizes more than 2.5 lac after which we did not see any material impact even on the share of high ticket ULIPs. Further, the VNB impact will be marginally lower than the sales impact as such high ticket size policies do operate at lower margins.”
The shares of Max Financial Services Limited on Thursday at 10:33 am were at Rs 720.25, down by 4.80 per cent.
