Starting 22 September 2025, premiums for individual life and health insurance policies will no longer carry the 18% Goods & Services Tax (GST). This decision, taken at the 56th GST Council meeting, is expected to make insurance more affordable, boost policy adoption, and strengthen financial security for millions of households.
Key Points of the GST Exemption
| Factor | Details |
|---|---|
| What’s Changing | GST on individual life and health insurance premiums reduced from 18% to 0%. |
| Effective Date | Applies from 22 September 2025 on new policies and renewals. |
| Who Benefits | Individual health insurance (including senior citizen/family floater plans) and all life insurance policies (term, endowment, ULIPs). Group insurance is excluded. |
| Savings Example | A ₹30,000 premium earlier meant paying ~₹35,400 with GST. Now, the entire 18% GST is waived, lowering the cost significantly. |
Why This Matters
More affordable protection: Families will pay less, encouraging wider adoption of insurance.
Better insurance value: The savings can be used to enhance coverage or add riders.
Improved accessibility: Households hesitant due to high premiums may now buy insurance.
Simpler billing: No extra tax calculations—what you see is what you pay.
Things to Keep in Mind
Renewals before 22 September will still attract GST.
Group health insurance through employers continues to be taxed.
Insurer adjustments possible: Since insurers lose input tax credit, some may tweak base premiums in the long run.
Clarifications pending: Official notifications will define how mid-term policies and billing cycles are handled.
FAQs
Q1: Will all policyholders benefit from this change?
Only those with individual life and health insurance policies renewed or purchased on or after 22 September 2025.
Q2: Does this apply to corporate or group health insurance?
No, group policies are still taxed at 18%.
Q3: Will my premium reduce immediately?
Yes, for policies renewed or bought after 22 September, the GST component will be zero.
Q4: Can insurers increase base premiums later?
Possibly, since they lose certain tax credits, but the immediate benefit to policyholders is a lower upfront cost.
Q5: How much will I save?
For a ₹30,000 premium, you save ₹5,400—the GST amount that would have been added earlier.
Published on : 11th September
Published by : SMITA
www.vizzve.com || www.vizzveservices.com
Follow us on social media: Facebook || Linkedin || Instagram
🛡 Powered by Vizzve Financial
RBI-Registered Loan Partner | 10 Lakh+ Customers | ₹600 Cr+ Disbursed
https://play.google.com/store/apps/details?id=com.vizzve_micro_seva&pcampaignid=web_share