Good News For Insurance Buyers! Life, Health Insurance Products Go GST-Free Early Before September 22

As consumers are eagerly waiting for the implementation of new Goods and Services Tax (GST) rates from September 22, several insurance industry players are already offering GST-free insurance products to customers. The GST Council, last week, announced revision of GST slabs and also reduced GST on multiple products. GST on health and life insurance products is reduced from 18% to 0%.

While the new GST slabs will come into effect on September 22, multiple insurance providers, including Star Health and Tata AIA, have begun offering insurance products with 0% GST for customers. The move is likely to attract large number of people and encourage them to purchase a term and health insurance.

Online insurance platform, Policybazaar, is also offering insurance plans with 0% GST from now. The coverage of these insurance plans with zero GST will beginf from September 22. " While the new GST regime officially goes live on 22nd September, the insurance industry has come together and worked to make 0% GST for customers feasible immediately. Health and term insurance are necessities, and there is no reason for families to delay their purchase. Since underwriting and policy issuance often take time, customers can now buy their policy today without paying GST, with coverage beginning from 22nd September. This ensures that they take the decision to protect themselves right away while fully benefiting from the government's reform," said Sarbvir Singh, Joint Group CEO, PB Fintech.

'Buying Zero GST Insurance Early Can Help Lock-in Protection'

Early purchase of GST-free insurance plans could help people in ensuring their protection. Offering insurance plans at reduced prices would not only provide early benefit to customers but will also remove any friction during the process, according to Anand Roy, MD and CEO, Star Health and Allied Insurance Co.

"The GST exemption on health insurance premiums is a landmark reform that will make protection more affordable and accessible for millions of Indians. While the reforms officially take effect from 22nd September, Star Health and intermediaries have come together to innovate and ensure that customers don't have to wait," said Roy.

"Starting now, customers can buy their health insurance policies without paying GST, with their coverage beginning from 22nd September. We strongly feel that health insurance is a necessity, not an optional expense. By enabling customers to lock in their protection now-well ahead of the reform date-we are removing any friction in the buying process and ensuring families remain covered without delay. This collaborative step demonstrates the industry's commitment to serving customers better and faster," he added.

Insurance Becomes More Affordable

People who are waiting for the new GST rates to come into effect for purchasing life and health insurance can take the step even now. As most of the companies have already removed GST on insurance plans. From now onwards, customers will only have to pay for the base value of their plan.

"The recently announced GST reforms mark a path-breaking step for the life insurance sector. By removing GST on individual life insurance policies, these reforms underscore the importance of life insurance as an essential consumer need. This move makes life insurance more affordable to a wider segment of the Indian population. It is a significant leap towards realizing the vision of 'Insurance for All' by 2047," said Jeelani Basha SA, President and Chief Distribution Officer, Tata AIA.