Overview

• An 18% GST on all individual life and health insurance premiums has been scrapped effective September 22, covering family floater and senior policies as well as related reinsurance.
• Insurers including LIC have begun applying the waiver, reducing what policyholders pay by up to 18% depending on the policy.
• The decision was approved at the 56th GST Council meeting on September 3 chaired by Finance Minister Nirmala Sitharaman.
• The government collected about Rs 16,398 crore from GST on life and health insurance in FY24, plus Rs 2,045 crore from reinsurance, highlighting the revenue trade-off.
• The exemption is part of the broader GST 2.0 rate overhaul, and analysts caution insurers may reprice products in coming quarters to offset input tax credit constraints.