Why is the Removal of 18% GST on Term Insurance Premiums Important?

Industry professionals are advocating for removing the 18% GST on term insurance premiums, arguing that it would make insurance more affordable and encourage wider adoption. The tax burden on life insurance has long been criticized, with stakeholders pushing for its elimination to ease costs for policyholders.

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Sandeep Pareek, Partner at BDO India, pointed out that removing GST would only benefit consumers if the top life insurance companies are allowed full input tax credit without any reversal due to the exemption. This move could lead to lower premiums, making term insurance more accessible to a broader population.

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₹75
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Life Cover

@ Starting from ₹ 12/day⁺

How Would the Removal of 18% GST Impact Your Term Insurance Premiums?

Currently, the 18% GST increases the cost of life insurance, discouraging many individuals from securing this essential protection. Siddharth Maurya, Managing Director of Vibhavangal Anukulakara Private Limited, noted that high taxation on these policies acts as a deterrent, especially for first-time buyers. With term insurance still in its early stages of widespread use in India, reducing or removing GST could significantly increase its adoption.

Overall, experts agree that eliminating GST would not only lighten customers' financial burden but also promote the growth of term insurance, a vital tool for safeguarding families’ financial futures.

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Why Removal of 18% GST Removal is Important?

Eliminating or reducing the 18% GST on term insurance premiums presents a significant opportunity to make insurance more affordable and accessible for a wider section of society. As experts highlight, this change could alleviate the financial burden on consumers while encouraging more individuals to opt for term insurance—a critical safeguard for families. By making policies more cost-effective and promoting widespread adoption, removing GST could play a crucial role in enhancing financial protection for countless households across India. Ultimately, such a move would be a step toward building a more secure and insured future.

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˜Top plans are based on annualized premium, for bookings made through https://www.policybazaar.com in FY 25.

Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by any insurer. This list of plans listed here comprise of insurance products offered by all the insurance partners of Policybazaar. For a complete list of insurers in India refer to the Insurance Regulatory and Development Authority of India website, www.irdai.gov.in

+Rs. 487/month (Rs.16/day) is starting price for a 1 crore term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 38 years of age.

Prices offered by the insurer are as per the approved insurance plans | #All savings and online discounts are provided by insurers as per IRDAI approved insurance plans | Standard Terms and Conditions Apply | **Tax Benefits are subject to changes in tax laws.| Policybazaar Insurance Brokers Private Limited

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+Rs. 820/month is starting price for a 2 crore term life insurance for an (NRI) 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 38 years of age.

+Rs. 1,443/month is starting price for a 5 crore term life insurance for an (NRI) 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 38 years of age.

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