There will be no GST on health and life insurance
The decision to zero the tax on life and health insurance premium of GST Council has come into force today i.e. from 22 September, 2025. Describing it as a ‘gift of Diwali’, the government has reduced the rates of GST (Goods and Services Tax) on most products and services including life and health insurance policy. Earlier 18 percent GST was used on insurance policy and from today they have become tax free. This step will directly affect millions of insurance customers. But every policy holder has a question in mind: will everyone benefit from it? The answer is not. Some policies will still not get the benefit of this exemption. Let’s understand why.
When will the existing policy holders benefit?
If you already have a policy, then this discount will only apply to the future premium. This means that 18 percent GST exemption will be applicable only when you fill your next premium after September 22. However, there will be no benefit at the old or earlier paid premiums.
Will the terms of the policy change?
No. The removal of GST will not change your policy terms, conditions or benefits. The only difference is that you have to pay less premium. Have you already paid a 3-year GST-interest premium advance grime? What will be the benefit then or not. If you have paid 2 or 3 years of GST-interest premium advance, then there is a disappointing news for you. According to the often asked on the website of SBI General Insurance, the GST paid on advance premium will not be refunded. This means that if you have already paid a premium of 3 years and GST has been imposed on it, then you will not get refund.
What do experts have to say on GST rate cuts?
In the report of Reenubaye co-founder and CEO Balchander Shekhar FE, GST will reduce the cost of families, especially senior citizens, especially for senior citizens, especially for senior citizens, which will make insurance more economical and accessible. Similarly, all personal life insurance policies-which include term life, ULIP or endowment policies-The removal of GST will increase the rich of insurance, especially between those who buy insurance and middle-income families for the first time, and the country will help in moving towards insurance by 2047. GST exemption is definitely a historical and progressive step. This will make insurance more economical and accessible for the common man in the future. But remember – there will be no return on old premium or advance payment. This means that the real relief will start from the upcoming premium itself.