GST Exemption on Insurance Policies – Benefit for Us?

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The long-pending demand of insurance companies and customers has now come true. The government has made GST zero percent on all types of personal insurance policies. This means, from now on, when we pay the premium, there’s no need to add extra tax. This decision will come into effect from the 22nd of this month.

For those who stayed away from insurance thinking the premium was too high, this is a golden opportunity. Now that the tax burden is removed, we should look at insurance as a must-have.

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Why is Insurance Important?

Term Insurance gives financial support to your family during unexpected situations.
Health Insurance protects you from big expenses during medical emergencies.

Nowadays, many people are already including these two in their financial planning. With the GST exemption, it makes even more sense to review your insurance and increase the coverage if needed.

Things to Keep in Mind

Choosing the Policy: Select a policy based on your family size, income, and health condition.
Compare Companies: Don’t just go for the cheapest premium. Look at the claim settlement ratio. For example, if one company pays 95% of claims and another pays only 80%, it’s better to choose the 95% one even if the premium is slightly higher.
Existing Policy Review: Check how much premium you’ve been paying till now with GST, and how much it will be now. Example – earlier, if you paid ₹40,000 premium + 18% GST = ₹47,200. From September 22, you’ll only pay ₹40,000.
Increase Coverage: With the tax savings, you can increase your policy coverage. Example – if you had a ₹50 lakh policy, you may now be able to increase it to ₹75 lakh with the same amount.
Extra Benefit in Health Insurance: Normally, the difference between a ₹5 lakh health policy and a ₹10 lakh policy is only about ₹3,000. With GST exemption, you can get higher coverage at the same old cost.

Quick Tip

At the time of policy renewal, talk to your insurance company once about the new benefits and coverage increase. You’ll clearly understand how much extra advantage you’re getting.

👉 In short, with GST exemption, insurance is no longer a burden. This is the right chance to get better coverage and stronger financial security.

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Vishnu Kumar

Vishnu Kumar Medukonduru completed study of B.Com & PG Diploma in Journalism. And a Senior journalist with over 26 years of experience across print, electronic, and digital media. Known for his sharp editorial instincts and deep understanding of public discourse, Vishnu has contributed to leading newsrooms in diverse roles—from field reporting and desk editing to content strategy and multimedia storytelling. (further details : visit : https://indiaworld.in/author/vishnu73/

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