19/08/2025
A Call to Slash GST to 0% for Health & Term Life, 5% for All Other Insurance Lines
India’s ambition of “Insurance for All by 2047” demands bold fiscal action. With health and term life insurance premiums currently burdened by an 18% GST, millions postpone or forgo essential protection. It’s time for the government, IRDAI, Finance Ministry, and all stakeholders to unite behind a new taxation framework:
• Health & Term Life Insurance: GST reduced from 18% to 0%
• Other Insurance Lines: GST capped at 5%
Why This Reform Matters
• Drives affordability: Eliminating the tax on health and term life policies makes coverage accessible to low-income families and seniors.
• Boosts pe*******on: Lower premiums will help India close the gap on global insurance pe*******on averages.
• Advances policy goals: A zero-rate on essential products and a 5% cap elsewhere aligns taxation with IRDAI’s universal coverage vision and supports social security.
Projected Economic & Social Impact
• Substantial savings: A household paying ₹50,000 in annual health premiums could save ₹9,000 in GST today—dropping to zero saves the entire amount.
• First-time buyers: Tax relief will encourage hesitant customers to adopt insurance, reducing future public healthcare burdens.
• Industry growth: Insurers can channel savings into product innovation, customer education, and rural distribution, fueling sustainable expansion.
A United Call to Action
We urge:
• The Finance Ministry to propose this GST amendment in the upcoming budget.
• IRDAI to endorse the structure and coordinate with industry players.
• Insurers, brokers, and consumer groups to voice support, ensuring swift legislative passage.
Let’s transform insurance from a luxury into a universal right—together.
Industry Stalwarts Weigh In
Narendra Bharindwal, President, Insurance Brokers Association of India
“Zero percent GST on health and term life insurance will remove a major entry barrier. Coupled with a 5% cap on other lines, this reform will accelerate pe*******on and drive India toward its 2047 insurance goals.”
Sharad Mathur, MD & CEO, Universal Sompo General Insurance
“Such a landmark tax policy shift can democratize financial security. By realigning GST, we strengthen individual resilience and reinforce the foundation of India’s social safety net.”
What’s your perspective on this proposed GST overhaul? Share your views and let’s drive the conversation forward.
&Investment .0
www.vitalityinsurance.in
Call now to connect with business.
