No GST from today: Health and life insurance premiums get cheaper early

Insurers and brokers roll out GST-free health and life policies ahead of Sept 22, letting buyers lock in cheaper cover now with premiums reflecting only the base cost.

Indian households planning to get health or life insurance will no longer have to wait till September 22 for the official rollout of the Goods and Services Tax (GST) cut on policies from 18 per cent to zero per cent, as insurers and online brokers have already begun offering plans without GST.

 

This means customers can buy their cover today, with the policy kicking in from September 22, at the revised, lower premium.

 

How it works

-Policies purchased now are issued on September 22

 

-No GST is charged at the time of buying

 

-The final payable amount is simply the base premium

 

Industry moves ahead of schedule

Insurance companies and distributors have moved quickly to make the reform effective for customers.

 

Anand Roy, managing director and chief executive officer of Star Health and Allied Insurance, said, “The GST exemption on health insurance premiums is a landmark reform that will make protection more affordable. Starting now, customers can buy policies without paying GST, with coverage beginning from September 22. Health insurance is a necessity, not an optional expense.”

 

Policybazaar is also offering GST-free purchases upfront. Sarbvir Singh, joint group chief executive officer, PB Fintech, noted, “While the new GST regime officially goes live on September 22, the industry has worked to make 0 per cent GST feasible immediately. Families should not delay protection, they can buy today and benefit fully from the government’s reform.” 

 

What it means for policyholders?

Lower cost: Premiums fall by around 15–18 per cent, making insurance more affordable

 

Immediate access: Customers can finalise their cover today, with no tax burden

 

Better protection: Lower premiums may encourage families to opt for higher sums insured

 

The government has pitched the move as part of its “Insurance for All by 2047” vision. While insurers may face higher costs due to loss of input tax credit, the consensus is that affordability for households will improve significantly.