Open your last year’s health insurance bill. Now delete the 18% GST line. That’s your new bill from 22 September 2025—because GST on individual health (and life) insurance is now 0%. This isn’t a festive discount; it’s the law.
What exactly changed
- Before: Most individual health (and life) premiums carried 18% GST.
- Now: GST = 0% on individual health and life insurance from 22 Sep 2025 (as per the 56th GST Council decisions).
This means the tax line disappears and you pay only the base premium on eligible policies issued or renewed on/after that date.
Who gets 0% (and who doesn’t)
Covered at 0% GST:
- Your individual health insurance (including family floater and senior citizen plans.
- Your individual life insurance (term, endowment, ULIP, etc.) These are explicitly covered under the Council’s recommendation to exempt individual health and life insurance.
Not covered / unchanged by this announcement:
- Employer group health policies (company-bought)
- Motor, home, travel and other general insurance classes – The exemption targets individual health & life policies, other categories weren’t part of this rate cut
How much will you actually save?
Think of it as removing an 18% topper from last year’s total.
- Premium ₹10,000 → earlier ₹11,800 → now ₹10,000 (save ₹1,800)
- Premium ₹20,000 → earlier ₹23,600 → now ₹20,000 (save ₹3,600)
- Premium ₹30,000 → earlier ₹35,400 → now ₹30,000 (save ₹5,400)
Media reports and analyst estimates say the effective reduction is about 15% of last year’s total (because you’re removing an 18% add-on). Either way, the saving is immediate and visible on the invoice.
The 60-second checklist
- Date check: Is your policy on/after 22 Sep 2025? Good—GST on eligible individual policies must be 0%.
- Invoice scan: Look for GST/IGST/CGST/SGST. The amount should be 0 on individual health/life.
- If GST shows up: Ask for a revised quote/invoice. Don’t pay first and “adjust later.” The exemption is in force.
- Use the saving smartly: With tax gone, consider raising sum insured or adding a super top-up—often at no extra cash versus last year’s total.
- Keep proof: Save the breakup/screenshot in case of billing confusion.
Common mistakes that will cost you
- “All insurance is tax-free now.” No. The 0% rate is for individual health & life. Car, bike, home, travel, and employer group covers follow their own GST rules.
- Missing the date: An invoice before 22 Sep 2025 may still show 18% GST legit for that date. Don’t lapse a policy just to chase the date; coverage continuity matters.
- Not checking the breakup. After the effective date, the GST line should be nil on eligible policies. If you see tax, push back with the official reference.
- Confusing GST with income-tax benefits. Section 80D (health premium deduction) continues, You now simply pay (and claim) the actual lower premium without GST. (Policyholders still get the deduction but the base is just smaller)
A note on “will insurers hike base prices?”
Some coverage notes that with GST at 0%, insurers may have less room for input tax credit on their costs. That’s a back-office issue, The Council’s intent is consumer relief, and competition should keep pricing honest. If you notice steep base hikes, compare across insurers before you renew.
Insider tip (from an ex-regulator’s desk)
If an agent’s software prints an old template with GST added, ask for a system-updated invoice or manual override before paying. The 56th GST Council decision clearly exempts individual health & life premiums from 22 Sep 2025. You’re entitled to a 0% GST bill.
Quick FAQs
Does 0% apply to riders/add-ons on my individual health policy?
If they’re billed as part of your individual health premium, the post-date invoice should reflect nil GST. Check the line-item.
My employer’s group policy shows GST—okay?
Yes. The exemption was announced for individual health & life, not employer group covers.
Can I expect my insurer to pass on the benefit automatically?
Yes—the GST line itself becomes 0 from the effective date on eligible policies. Always verify the invoice.
Bottom line
From 22 Sep 2025, the GST line on your personal health (and life) premium should read “0.” If it doesn’t, pause the payment, demand a revised bill, and use the tax you just saved to buy more cover and not more trouble.
