Key Points

Speaking about the reform, Amit Chhabra, Chief Business Officer at Policybazaar, told ANI, "For the customers, it is an extremely beneficial move because they are getting an 18 per cent instant discount on health insurance and life insurance."

Chhabra said the government's decision will not only reduce costs but also help in increasing awareness. "I would feel that the other important aspect is that the awareness will significantly go up now. Govt has come out and endorsed that there is no GST now on health insurance and life insurance. I feel this is an extremely positive move because the Govt is saying that it is a mandatory product and it must be bought by every citizen of the country," he said.

Chhabra added that the change is expected to encourage more people to opt for financial protection. "So, the awareness will go up, and more & more people will buy health insurance and life insurance," he noted.

Balachander Sekhar, Co-founder & CEO of RenewBuy, said that by removing the 18 per cent GST burden, the government has made protection more affordable, accessible, and attractive for millions of households.

"With GST now reduced to nil, the exemption on all individual life and health insurance policies will significantly bring down costs for families, especially seniors, making insurance more affordable and accessible. Similarly, the removal of GST on individual life insurance policies--including term life, ULIP, or endowment policies--will boost insurance penetration, particularly among first-time buyers and middle-income families, and help the country progress towards Insurance for All by 2047."

He added that the GST waiver on individual life and health insurance is not just a tax reform, but a transformative step towards financial inclusion. "In essence, this reform is more than a fiscal adjustment; it is a social safety net expansion. The move will ease costs for seniors, boost penetration among middle-income households, and strengthen India's journey towards 'Insurance for All by 2047'," he said.

The new framework marks one of the biggest overhauls of the GST system since its launch in 2017. The new rules come into effect from Monday, September 22, 2025. The reforms replace the earlier four-rate structure with a simpler two-slab system of 5 per cent and 18 per cent. Essential sectors, including food, housing, automobiles, agriculture, healthcare, and education, are set to be impacted.

- ANI