The 18% GST on health
insurance premium will be removed starting September 22, 2025,
offering significant cost relief to families across India. This change means
that policyholders will no longer pay this tax on premium, effectively reducing
the average premium burden by 18%.
Dr. Selina
Rajathi, Head of A&H Claims at Royal Sundaram stated, “This GST
exemption is a pivotal moment for health insurance in India. Families,
particularly middle-income groups, will feel the immediate financial benefit.
At Royal Sundaram, we are committed to translating these regulatory benefits
into affordable healthcare protection for every Indian family.”
What This Means for Families and Policyholders
For many Indian households,
health insurance is a vital safety net, but the added GST previously made
premium less affordable. The government’s decision to exempt all individual
health insurance premium covering family floater plans, senior citizens’
policies, and individual covers, from the 18% GST is a welcome relief. This
policy change is expected to encourage more people to either purchase new
health insurance plans or renew existing ones, making quality healthcare more
accessible.
Royal Sundaram’s Commitment
Health insurance has become
more critical than ever, especially in today’s world where medical costs are
rising rapidly and health risks are increasingly unpredictable. Royal Sundaram
believes that comprehensive health protection should be accessible to people
from all walks of life, not just a privileged few.
Adding to this, Dr. Selina Rajathi from Royal Sundaram said, “In the
current healthcare landscape, every family deserves the peace of mind that
comes with robust health coverage. With the GST exemption, we now have a unique
opportunity to make health insurance more inclusive and ensure that protection
reaches every household, regardless of income level.”
How to Take Advantage of the GST Relief Now
The removal of GST on health
insurance premium is a rare fiscal move that directly eases the financial
burden on families while simultaneously encouraging broader insurance penetration.
The timing could not be more crucial: healthcare costs in India have surged in
the last five years, and chronic illnesses such as diabetes, heart disease, and
respiratory conditions are affecting more Indians than ever before.
It’s notable that in the Total Health Expenditure between 2014-15 and 2021-22,
the share of Government Health Expenditure increased from 29% to 48%, leading
to a decline of Out-of-Pocket Expenditure from 62.6% to 39.4%. However, the
latter is still a very high figure, one that the new GST implementation hopes
to reduce greatly.
By eliminating GST on
premiums, families can now save significantly, making it easier to invest in
comprehensive coverage for themselves and their loved ones. Even a single
policy renewal or new purchase can translate to hundreds or thousands of rupees
in savings, a meaningful step toward wider health insurance adoption and better
financial protection against unexpected medical costs.
Individuals planning their
policy renewals or new purchases should consider this timing as an opportunity
to maximise their savings and secure long-term health coverage. For more
information on how Royal Sundaram is helping families benefit from this GST
relief and affordable health insurance options, visit Royal Sundaram’s official
website and secure your family’s
future today.
