Big GST Relief: Lower Health Insurance Premiums from Sept 22, 2025

Good news for health insurance buyers — from 22 September 2025, GST on individual health (and life) insurance premiums is removed. Here’s how much you can save and what to know.

Published: 22 September 2025  •  Author: Sanjeev Kumar

Quick Take

• From 22 Sept 2025, GST is no longer charged on individual health and life insurance premiums.
• Policyholders could save up to 18% on renewal bills or new purchases.
• Insurers are still working out details on how much of the saving reaches you, depending on tax classification.

Why this matters

Health insurance is an essential household expense. Until now, a typical family floater policy worth ₹40,000 attracted an extra ₹7,200 as GST (18%). That tax burden is now gone, making health protection more affordable for millions of families.

Example savings

Policy Type	Premium (Before GST)	Earlier Total (18% GST)	New Total (Post-22 Sept)	Savings
Family Health Insurance	₹40,000	₹47,200	₹40,000	₹7,200
Individual Health Insurance	₹15,000	₹17,700	₹15,000	₹2,700

What’s the catch?

“If the exemption is marked as nil-rated, customers benefit fully. If it’s treated as exempt, insurers may lose tax credits on expenses, which could limit the savings passed on.”

Experts advise waiting for official clarifications but say bills after Sept 22 should clearly show the difference.

FAQs

• Will I get a refund on premiums I paid before Sept 22? — No, the rule applies only going forward.
• Does this cover corporate health plans? — No, the benefit is limited to individual health and life policies.
• Should I delay renewal? — No, don’t risk losing coverage. The saving is real, but health protection is more important.

What you should do

1. Check your renewal bill after Sept 22 to ensure GST is not charged.
2. Ask your insurer how they are passing the benefit to you.
3. Don’t skip or delay coverage just to save a little — your protection matters more.

Bottom line

From 22 September 2025, individual health insurance gets lighter on the pocket. Expect to save almost 18% on your premiums, though final savings may vary depending on tax clarifications. Either way, this is a rare piece of good news for policyholders.

Disclaimer: This article is for information only. Always check your insurer’s official communication and government notifications before making financial decisions.