Exemption of GST from life and medical health insurance premium to make merchandise inexpensive: Insurers

Terming the GST Council’s resolution to exempt insurance coverage premium from the oblique tax as a landmark transfer, insurers mentioned this may assist make merchandise extra inexpensive and develop insurance coverage penetration.

GST Council assembly highlights on September 4, 2025

Announcing the result of 56th GST Council assembly, Finance Minister Nirmala Sitharaman on Wednesday (September 3, 2025) mentioned all particular person life insurance coverage insurance policies whether or not time period life, ULIP or endowment insurance policies and subsequent reinsurance are exempt from GST.

All particular person medical health insurance insurance policies, together with household floater insurance policies and insurance policies for senior residents and reinsurance thereof, may also be exempt from GST, she mentioned.

Since its inception in July 2017, GST on the charge of 18% is levied on premium paid in the direction of medical health insurance and life insurance coverage.

Commenting on the GST Council resolution, LIC CEO & MD R. Doraiswamy termed the speed rationalisation as “visionary initiative”.

Removal of GST on particular person life insurance coverage merchandise, a step in the direction of making life insurance coverage extra inexpensive to all residents of the nation to fulfill the target of insurance coverage for all by 2047, Mr. Doraiswamy mentioned.

Sharing his thought Ashok P. Hinduja, chairman, Hinduja Group of Companies (India) mentioned steps like eradicating GST on life and well being insurances will show to be revolutionary on this regard.

At a time when medical inflation is rising steeply, this step straight advantages residents and eases the monetary burden on households, Bajaj Allianz General Insurance MD & CEO Tapan Singhel mentioned.

This progressive resolution will speed up insurance coverage penetration and strengthen the nation’s well being safety, he mentioned.

Echoing comparable views, HDFC ERGO General Insurance govt director & CFO Samir Shah mentioned from a client standpoint, the fast profit is that it straight interprets to enhanced affordability.

However, he mentioned, “We are intently analysing the implications in regards to the enter tax credit score. While it’s anticipated that there might be decreasing of the premiums as a consequence of decreasing of the taxes, we’re but to know the extent of this discount as this may also rely on availability of the enter tax credit score, which is able to develop into clearer over the approaching days.”

Commenting on the choice, IFFCO TOKIO General Insurance MD & CEO Subrata Mondal mentioned the removing of GST is predicted to considerably improve the affordability of medical health insurance, thereby enhancing penetration throughout various inhabitants segments.

Reduced premium prices will probably incentivise extra people and households to buy or improve their medical health insurance protection, strengthening monetary resilience towards medical bills and easing out-of-pocket burdens, Mr. Mondal added.

ManipalCigna Health Insurance MD & CEO Joydeep Saha this much-awaited reform will assist hundreds of thousands of households safeguard themselves towards unexpected medical bills with out worrying about affordability at a time when medical prices and healthcare inflation are on the rise.

The reform won’t solely profit current prospects but additionally empower extra households to go for medical health insurance protection, Mr. Saha added.

Insurance Brokers’ Association of India (IBAI) president Narendra Bharindwal mentioned the exemption of GST on all particular person life insurance coverage insurance policies, whether or not time period life, ULIPs, or endowment and on particular person medical health insurance insurance policies, together with household floater and senior citizen plans, marks a historic step in the direction of common insurance coverage inclusion.

Aalesh Avlani, co-founder, Credit Wise Capital, this reform will additional speed up the shift in the direction of digital-first, hassle-free financing options, empowering extra customers to fulfil their aspiration of proudly owning a two-wheeler.