Is GST charged on health insurance now?

No, not on individual health policies, including family floater and senior citizen plans, for premiums paid on or after 22 September 2025. Group health policies still carry 18%.

Is there GST on term insurance?

No. All individual life insurance, including term, endowment and ULIP plans, is exempt from 22 September 2025.

Is motor insurance GST-free too?

No. Motor insurance, both third-party and own damage, still carries 18% GST, as do travel, home and business policies.

Why did my premium not drop by the full 18%?

Insurers lost input tax credit on their own costs when these policies became exempt, and some raised base premiums slightly to cover it. The GST line on your bill should still be nil.

Is GST charged on my employer's group health cover?

Yes, at 18%. In October 2026 the GST Council recommended letting employers claim it as input tax credit, which needs a law change first.

GST on insurance premiums

Updated 11 October 2026

Since 22 September 2025, premiums for individual life insurance (term, endowment, ULIP and other plans) and individual health insurance (including family floater and senior citizen policies) carry no GST. Before that, health and term premiums attracted 18%. Group policies bought by employers, and motor, travel, home and business insurance, still carry 18%.

GST on insurance: before and now

Policy	Before 22 Sep 2025	Now
Individual health insurance, including family floater and senior citizen plans	18%	Nil
Individual term life insurance	18%	Nil
Endowment, money-back and other traditional savings plans	Effective 4.5% in the first year, 2.25% later	Nil
ULIPs	18% on charges, not on the amount invested	Nil
Group health and group term cover, for example from an employer	18%	18%
Group credit life cover linked to loans	18%	18%
Motor insurance, third-party and own damage	18%	18%
Standalone travel, home, fire and shop insurance	18%	18%

The exemption was made by Notification 16/2025-Central Tax (Rate) of 17 September 2025, following the 56th GST Council meeting, and also covers reinsurance of these policies.

Which premiums are exempt

The Department of Financial Services' FAQs explain how the date works:

GST depends on when the premium is paid. A premium due on 21 September 2025 but paid on or after 22 September carried no GST.
For monthly or quarterly instalments, each instalment paid on or after 22 September 2025 is exempt, even if the policy began earlier.
For advance payments, the exemption applies when two of the three events (the service, the invoice and the payment) fall on or after 22 September 2025.
A health policy with built-in personal accident or travel cover sold for a single price is exempt as a whole. For standalone covers, check the GST line on the policy schedule.
Premiums paid on or after 22 September 2025 to revive a lapsed policy are exempt.

Why your premium may not fall by the full 18%

An exempt service does not let the insurer claim input tax credit on its own costs, such as commissions, advertising, office rent and technology. Before the exemption, insurers set that GST off against the GST they collected; now it is a cost. Some insurers have adjusted base premiums or commission structures to absorb it, so the saving you see can be a little less than 18%. Compare the base premium on your renewal notice with last year's.

What to check at renewal

The GST line on an individual life or health policy should be nil for any premium paid on or after 22 September 2025. A renewal notice that adds 18% to such a premium needs correcting.
Covers sold as separate policies, such as standalone travel insurance or a motor policy, still carry 18%, so a combined statement from one insurer can show both.
Claim settlements and maturity payouts carry no GST; it applies only to premiums.
Non-resident Indians buying individual policies get the same exemption, or zero-rating where the policy meets the conditions for an export of services.

Worked example. A family floater health policy with a base premium of ₹24,000:
Before 22 September 2025: ₹24,000 + 18% GST of ₹4,320 = ₹28,320.
Now: ₹24,000, a saving of ₹4,320. Even if the insurer raises the base premium by 4% to ₹24,960, you save ₹28,320 minus ₹24,960 = ₹3,360.
A term plan with a base premium of ₹15,000 now costs ₹15,000 instead of ₹17,700.
Car insurance with a base premium of ₹12,000 still costs ₹12,000 + ₹2,160 GST = ₹14,160.

Employer group cover and the October 2026 proposal

Group health and group term policies that employers buy for staff still carry 18%. Today a business generally cannot claim this GST as input tax credit unless the law requires it to provide the cover. At its 57th meeting on 8 October 2026, the GST Council recommended taking health and life insurance off the list of blocked credits. Once the law is amended, employers should be able to claim the GST on group cover, subject to conditions still to be specified. See input tax credit.

Income tax deductions are unchanged

The GST exemption does not change income-tax rules. Under the old regime, health insurance premiums qualify for deduction under section 80D (section 126 of the Income-tax Act, 2025) and life insurance premiums under section 80C (now section 123), within their limits. The new regime does not allow these deductions. See section 80D and section 80C. To see what 18% adds to any other premium, use the GST calculator.