No more 18% GST on individual health, term insurance premiums
From September 22, the Indian government is scrapping the 18% GST on individual health and term insurance premiums.
So, if you're paying ₹35,400 a year for a ₹30,000 policy (thanks to GST), you'll now pay just ₹30,000—saving you ₹5,400 instantly.
The move aims to make essential insurance more affordable for individuals and households.
What about group insurance schemes?
This GST exemption covers all individual life insurance policies—think term plans, ULIPs, endowment—and personal health plans like family floaters or senior citizen covers.
But heads up: group schemes (like those from your employer) still carry the usual 18% GST.
Basically, this is direct relief for individuals buying their own coverage.
Insurers might tweak premiums in future
While it's great news for buyers right now, insurers lose out on input tax credit for their expenses—which could mean higher costs on their end.
Industry officials say a lower GST rate (like 5%) might've been better overall.
For now though, companies are expected to absorb these costs in the current fiscal year but might tweak premiums in the future to balance things out.