No GST on Health & Life Insurance Premiums from Sept 22, 2025

From Sept 22, 2025: No GST on Health & Life Insurance Premiums – Save 18% Instantly

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Starting September 22, 2025, all individual health and life insurance premiums will be GST-free in India. Learn what this means, who benefits, and how to save on your premium.

Introduction

Great news for policyholders! From September 22, 2025, the Indian government has announced that all individual health and life insurance premiums will be completely free from GST (18%). This means a direct saving of 18% on your premium payments.
This change is part of GST 2.0, aimed at making insurance more affordable and improving insurance penetration in India. In this blog, we’ll explain everything you need to know about this big change.

What Was GST on Insurance Before?

Before this change, all health and life insurance policies carried an 18% GST. For example:

Premium = ₹30,000
GST = ₹5,400
Total = ₹35,400

From September 22, 2025, GST will be zero on individual policies. So, the same premium will now cost ₹30,000 only.

What Exactly Will Change?

Old Rule: 18% GST on health and life insurance premiums.
New Rule: Zero GST from September 22, 2025.
Applies to: Individual policies – health insurance, term life, ULIP, endowment plans.
Does NOT apply to: Group insurance policies (company-provided plans).

Who Will Benefit the Most?

Individuals and Families – Direct 18% saving on premiums.
Senior Citizens – High premiums will now be cheaper.
First-Time Buyers – Affordable policies encourage more people to get insured.

Example:
Premium ₹50,000 → Earlier ₹59,000 → After GST removal ₹50,000 → Saving ₹9,000 per year!

Should You Delay Payment Until September 22?

The IRDAI has clarified:

GST exemption applies only if your renewal date is after Sept 22, 2025.
If you delay payment and your policy lapses, you may face penalties or lose coverage.
No GST refunds for advance payments.

So, do not delay your premium if it’s due before September 22.

Why Is This Important?

India’s insurance penetration is only 4% of GDP, compared to the global average of 7%. High premiums due to GST made insurance costly. Removing GST will:

Encourage more people to buy insurance.
Reduce out-of-pocket healthcare costs.
Boost financial security for families.

Savings Calculation (Examples)

Premium Amount	Earlier Cost (18% GST)	New Cost (0% GST)	Savings
₹10,000	₹11,800	₹10,000	₹1,800
₹25,000	₹29,500	₹25,000	₹4,500
₹50,000	₹59,000	₹50,000	₹9,000

5 Tips to Benefit From GST Exemption

Check Your Renewal Date – If after Sept 22, you will automatically save.
Don’t Delay Current Premium – Avoid policy lapse for a small saving.
Plan New Purchases – If you were waiting to buy insurance, Sept 22 onwards is the best time.
Compare Insurers – Base premium may change since insurers lose ITC.
Take Long-Term Cover – Secure your family with affordable plans.

Any Concerns?

No refund of GST on old premiums.
Insurers lose Input Tax Credit (ITC), which could affect pricing.
Group insurance policies still taxable.

Conclusion

Starting September 22, 2025, all individual health and life insurance premiums will be GST-free. This will help you save 18% instantly and make insurance more affordable for millions of Indians.

If you have been planning to buy or renew your insurance, this is the best time to review your options and take advantage of this huge benefit.

FAQs

Q1. From when will GST be removed on insurance premiums?
From September 22, 2025, for individual health and life insurance policies.

Q2. Does it apply to group insurance provided by employers?
No, group insurance policies will still have GST.

Q3. Will I get a refund for GST already paid?
No, there will be no refund or adjustment for past premiums.

Q4. Should I wait to buy insurance?
If your need is urgent, buy now. If you can wait until September 22, you will save 18%.

Q5. What types of policies are included?
Individual health insurance, family floater plans, senior citizen plans, and individual life insurance policies.

Subhankar Biswas