From September 22, 2025, individual health and term insurance premiums in India will drop by 18%, thanks to the government’s decision to remove GST on these policies. A ₹30,000 health policy, for example, now saves policyholders ₹5,400 instantly.

But there’s a twist: this relief doesn’t apply to group insurance plans, which still carry 18% GST. While households breathe easier, insurers face a challenge—input tax credits (ITC) vanish, potentially impacting balance sheets. Experts suggest a 5% GST could have balanced affordability for consumers with operational ease for companies, but the government chose full exemption.

Industry insiders warn that insurers may later adjust premiums to recover ITC losses, meaning the benefit reaching consumers could vary. Still, for millions of households, this move could finally make insurance affordable, accessible, and inclusive, deepening coverage for previously underserved sections.

The countdown begins: from September 22, your health and financial security could cost less—but how much will you really save?