Life Insurance, health Insurance policies are now exempted from GST

 

The new GST rules will come into effect from September 22, 2025.

The 56th GST council has met and made its decisions, with a pivotal one being the complete exemption of GST from all individual life and health insurance policies.

In life insurance, this includes exemption on term life policies, ULIPs, endowment polices and reinsurance.

For health insurance, individual health, family floater and senior citizen policies all are exempted.

The new GST rules will come into place on 2025 September 22.

Previously, the GST on both life and health policies were 18%.

 

Speaking after the 56th GST meeting, the finance minister Ms. Nirmala Sitharaman said that, "Insurance services from 18% currently will go into two, three different categories. Exemption of GST on all individual life insurance policies, whether term life, ULIP, or endowment policies, and reinsurance thereof, to make insurance affordable for the common man and increase the insurance coverage in the country.

 

Exemption of GST on all individual health insurance policies, including family floater policies and policies for senior citizens, and reinsurance thereof to make insurance affordable for the common man and increase the insurance coverage in the country."

Narendra Bharindwal, President, Insurance Brokers Association of India (IBAI) said that the move will make insurance more affordable for households across all segments. It will ensure greater penetration of life and health insurance, supporting India’s vision of “Insurance for All by 2047.”

Also, it will provide significant relief to senior citizens, for whom health insurance is a critical necessity in the later stages of life.

“This reform not only reduces the cost burden on policyholders but also strengthens trust in insurance as a reliable safety net for families and individuals.

The exemption on reinsurance thereof further ensures sustainability and stability in the ecosystem,” he added.