0% GST on Health Insurance: How You Can Save on Premiums

0% gst on health insurance

Good news for health insurance policyholders in India! Starting September 22, 2025, the government has reduced the 18% GST to 0% Gst on health insurance premiums. This decision makes insurance more affordable and this is a huge relief especially for families and senior citizens. In this guide we’ll explain what this change means, how much you can save and how to save more.

What Changed in GST for Health Insurance?

In the Past health insurance premiums are with 18% GST which added a significant cost to your policy. example:

  • A policy with a ₹15,000 base premium would cost ₹17,700 with GST.
  • Now, with zero GST, the same policy costs only ₹15,000 without GST saving ₹2,700 immediately.

This applies to:

  • Individual health insurance plans
  • Family floater plans
  • Senior citizen health insurance
  • Reinsurance of these policies

Important: Group health insurance will still attract 18% GST. Also, the exemption applies only to premiums paid on or after September 22, 2025.

Why Did the Government Do This?

The main purpose is to make health insurance more affordable and accessible high GST rates were a barrier especially for middle-income families and senior citizens. By removing this tax, the government encourages:

  • First-time buyers to invest in health insurance
  • Families to get adequate coverage without financial strain
  • Greater insurance penetration in India, aligning with the vision of “Insurance for All by 2047.”

How Much You Can Save?

The zero GST policy can reduce premiums by 10 to 15%, depending on your plans and insurer.

Examples:

  1. Individual policy: Base premium ₹10,000 → before ₹11,800 with GST → Now ₹10,000.
  2. Family floater: Base premium ₹50,000 → before ₹59,000 with GST → Now ₹50,000.

This is a saving, especially for family and senior citizen plans, which have higher premiums.

Who get the most benefits?

  1. Senior Citizens – before premiums are higher due to age, removing GST saves thousands every year.
  2. Families – Family floater plans covering multiple members see a substantial reduction in total cost.
  3. First-Time Buyers – Young adults and middle-income households now have lower entry barriers to health insurance.

Top 4 Benefits of 0% GST on Health Insurance

1. Low Premiums for everyone

No more 18% GST means instant savings across most individual and family plans. Even if insurers adjust base premiums policyholders still save around 10-15%.

2. Better Coverage with Same Budget

You can use the saved money to increase your sum insured or add riders like maternity cover, critical illness or OPD benefits.

3. Easy for First-Time Buyers

Lower premiums make insurance more accessible for people who were hesitated due to costs. This helps more families invest in protection.

4. Supports Insurance Penetration

This encourages more people to buy insurance, which aligns with India’s goal of universal health coverage and reduces the burden of out-of-budget medical expenses.

How to Make the Most of 0% GST on Health Insurance

1. Set Time for Your Policy Purchase or Renewal

Only premiums paid on or after September 22, 2025, qualify for zero GST. If your renewal is near this date, consider adjusting your policy start date to maximize savings.

2. Use Savings to increase Coverage

The funds saved from GST can be used to increase sum insured or include premium features like OPD services, maternity cover, or critical illness protection.

3. Review your Existing Policies

Check your current coverage and see if you can make it for better protection without increasing your budget.

4. Combine with Tax Benefits

Health insurance premiums are still for tax deductions under Section 80D, making insurance even more affordable.

Example: Premium Savings Break down

Policy Types Base Premiums Premiums with 18% GST Premiums After GST Removal Savings
Individual Health Plan ₹10,000 ₹11,800 ₹10,000 ₹1,800
Family Floater ₹50,000 ₹59,000 ₹50,000 ₹9,000
Senior Citizen Plan ₹50,000 ₹59,000 ₹50,000 ₹9,000

Key Points

  • Active from Sept 22, 2025 – zero GST on individual, family floater, and senior citizen plans.
  • instant savings of 10-15% on premiums.
  • Increased coverage with savings, add ons, or increase sum insured.
  • Senior citizens benefit most due to higher premiums.
  • New buyers now have easier access to affordable insurance.

Conclusion:

The removal of GST on health insurance is a game changer for policyholders in India. It lowers costs, improves access, and allows families to strengthen their coverage without extra expense.


You are renewing your existing plan or buying health insurance for the first time, September 22, 2025, is the date to watch. By taking advantage of 0% GST on Health Insurance, you can save more, add benefits, and secure your family’s financial future.

This is not just a tax relief – it’s a step for making quality healthcare coverage for Indians.

For more information and to compare health insurance plans, visit MyInsuranceDost.com.

FAQs

Q1. When does the GST exemption start?

  • September 22, 2025, for individual, family floater, and senior citizen plans.

Q2. How much can I save?

  • Savings range from 10-15%, depending on the policy and insurer.

Q3. Are tax benefits still applicable?

  • Yes, premiums continue to qualify under Section 80D.

Q4. Can I use GST savings to upgrade coverage?

  • Absolutely! You can increase sum insured or add riders like OPD and critical illness.

Q5. Are group health insurance policies included?

 

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