The GIFT City insurance market has witnessed significant expansion with multiple major insurers now offering dollar-denominated products for non-resident Indians. Companies including HDFC Life International, ICICI Prudential Life, ICICI Lombard, Star Union Dai-ichi Life, IndiaFirst Life, and Tata-AIG General have joined the market, targeting non-resident Indians (NRIs), persons of Indian origin (PIOs) and Overseas Citizens of India (OCI) who earn in foreign currencies. This expansion represents a substantial growth from the initial eight insurers that previously operated in GIFT City, with most focusing on unit-linked insurance policies and relatively few offering term insurance options.
The expansion comes as Policybazaar's parent company reported exceptional Q1 FY27 results, with net profit jumping 92% year-on-year to ₹163 crore. Operating revenue grew 40% to ₹1,888 crore, while total insurance premium increased 41% to ₹8,372 crore. The company's PAT margin improved to 9% from 6% a year ago, demonstrating strong operational efficiency. The Gurgaon-based insurance distribution platform is now targeting a listing by March 2027 with an expected valuation of around ₹9,500 crore, indicating growing investor confidence in the GIFT City insurance ecosystem.
The ULIP market offers several options including Global Wealth Advantage (HDFC Life), Wealth Wise (IndiaFirst Life), Smart Global Investment (Axis Max Life), Global Wealth Accelerator (ICICI Prudential Life), and Shubh Global Invest (Tata AIA). As reported by Mint, GIFT City Ulips receive an uncapped Section 10 (10D) exemption as long as premiums stay under 10% of the sum assured, which is more generous than mainland ULIP tax caps introduced since 2021. However, for pure term insurance, the tax advantage is less compelling as death claims remain tax-free regardless of policy type.
According to Mint reports, dollar-denominated policies make sense when NRIs and their dependents are settled abroad with major liabilities in foreign currency, as rupee depreciation could reduce purchasing power. Term insurance premiums can be around 50-60% higher in GIFT City compared to local plans, with ULIP fund management charges reaching 2-2.5% compared to India's 1.35% cap. Lakshit Mahajan from Policybazaar noted that the higher cost must be weighed against currency matching benefits and tax treatment rather than comparing premiums alone.
As reported by Mint, GIFT City policies cannot be funded from ordinary Indian accounts like NRO accounts - payments must come through permitted foreign-currency channels such as NRE/FCNR accounts, overseas bank accounts, or international cards. Varun Gupta from IndiaFirst Life explained that premium realization can sometimes take longer due to international wire transfers passing through intermediary banks. When claims occur, insurers typically credit proceeds to accounts linked to premium payment sources, meaning if premiums were paid via NRE account, proceeds will also go there.
