13th month persistency

What is 13th month persistency?

13th month persistency is the percentage of regular premium and limited premium life insurance policies that are still in force after the first renewal premium falls due. It is measured in the 13th month after issue, once the grace period for the second year's premium has passed. It is the earliest of the five persistency checkpoints Indian life insurers disclose, and the one most closely watched by sales teams because it reflects the quality of last year's selling.

A 13th month persistency of 82% on a premium basis means that policies carrying 82% of the cohort's annualised premium paid the first renewal. The remaining 18% is the 13th month lapse ratio.

How 13th month persistency is measured

The calculation follows the standard method IRDAI set in its circular of 23 January 2014, now referenced in insurers' disclosures through the Master Circular on Submission of Returns, 2024. In outline:

1. Take every regular and limited premium individual policy issued in a 12-month window (the cohort).
2. At the measurement date, about a month after the window ends so the grace period has run, check which policies have paid the renewal due in month 13.
3. Divide the premium (or the count) of paying policies by the cohort total.

Single premium and fully paid-up policies are reported separately, because they have no renewal to miss.

Worked example (illustrative numbers)

A bank partner sells 2,000 regular premium policies in a year. Their total annualised premium is ₹6 crore.

• At the 13th month, 1,500 policies carrying ₹4.92 crore of premium have paid.
• Premium basis: 4.92 ÷ 6 = 82%.
• Policy count basis: 1,500 ÷ 2,000 = 75%.
• The ₹1.08 crore that did not renew is gone from next year's renewal premium, and the commission and acquisition cost spent on those policies is largely unrecovered.

How 13th month persistency is reported in India

Life insurers publish it every quarter in public disclosure form L-22 (Analytical Ratios), on both the premium basis and the number of policies basis, "for the quarter" and "up to the quarter". Listed insurers repeat the premium-basis figure in results releases.

Trade press compilations of L-22 data for April to December 2025 put the 13th month premium persistency of most private life insurers between about 75% and 87%.

Why 13th month persistency matters

Most of a life policy's acquisition cost is paid in year one, through first-year commission, sales staff costs, medical tests and issuance. The insurer recovers that cost from renewal premiums in later years. A policy that lapses at the first renewal rarely pays back what was spent to acquire it. That is why first-year lapses hurt value of new business more than any other kind.

13th month persistency is also an early warning on conduct. Customers who did not understand they had signed up for a multi-year commitment, or who bought because a loan or deposit was conditional on it, usually stop at the first renewal. IRDAI and the Department of Financial Services have repeatedly raised mis-selling with insurers, and a weak 13th month figure for a channel or branch is often where an investigation starts.

What 13th month persistency means for distribution

• Set it as a sales KPI, not only a service KPI. Sellers control most of what drives the first renewal: whether the premium fits the customer's income, whether the term was explained, and whether auto-debit was set up.
• Review it by cohort and by seller. A single company figure hides the problem. Insurers that look at 13th month persistency by bank branch, agent, broker and product find concentrated pockets of poor business.
• Act inside the grace period. Reminder calls in the month before and the month after the due date, with a payment link, recover a share of policies that would otherwise lapse. Policy revival campaigns pick up some of the rest.
• Expect it in partner pay. After the October 2024 surrender value changes, listed insurers moved to commission structures that reward partners with better persistency, so 13th month numbers now feed directly into channel economics.
• Check the free look data too. High cancellations during the free look period and weak 13th month persistency usually come from the same sellers.
• What a good adviser tells the customer: the premium and how long it must be paid, what is lost on an early exit, and how to pay renewals without missing the grace period.