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GST Exemption Proposed on Individual Life and Health Insurance

22 August 20251 min read
ECONOMYGST ExemptionProposed onIndividual Life andHealth Insurance22 August 2025safalsetu.com

Why in the news

To make insurance cheaper and widen inclusion, the Centre moved to remove GST from individual life and health cover.

Key facts

  • GoM on health and insurance: 13 members, led by Samrat Choudhary.
  • Goals: lower consumer burden, strengthen healthcare, support schemes such as Ayushman Bharat.
  • GST applies only to premiums, not bonuses, surrender amounts, maturity or claim payouts.
PolicyExisting GST
Individual life18% on premium; ULIP investment part excluded
Individual health18% on premium, including riders like critical illness
Family floater18% on total premium
Corporate or group healthDifferent rules possible, generally 18%

Exam angle

  • Existing rate: 18% on premium.
  • GoM head: Samrat Choudhary.

Test yourself

1. What GST rate applied on individual life and health insurance premiums before the exemption proposal?

The existing rate is 18% on premium.

2. The GoM on health and insurance that endorsed the GST exemption has how many members?

It is a 13-member Group of Ministers.

3. GST on life and health insurance applies to which amounts, per the notes?

GST is charged only on premium payments.