The Indian government has announced that it will remove the 18% Goods and Services Tax (GST) on health insurance premiums starting September 22, 2025. This move is expected to provide significant cost relief to families across India, reducing the average premium burden by 18%. According to Dr. Selina Rajathi, Head of A&H Claims at Royal Sundaram, this GST exemption is a pivotal moment for health insurance in India, and families, particularly middle-income groups, will feel the immediate financial benefit.
The government’s decision to exempt individual health insurance premiums, including family floater plans, senior citizens’ policies, and individual covers, from the 18% GST is a welcome relief for many Indian households. Health insurance is a vital safety net for many families, but the added GST previously made premiums less affordable. This policy change is expected to encourage more people to purchase new health insurance plans or renew existing ones, making quality healthcare more accessible.
Royal Sundaram believes that comprehensive health protection should be accessible to people from all walks of life, not just a privileged few. With the GST exemption, the company sees an opportunity to make health insurance more inclusive and ensure that protection reaches every household, regardless of income level. The removal of GST on health insurance premiums is a rare fiscal move that directly eases the financial burden on families while encouraging broader insurance penetration.
The timing of this move is crucial, as 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. 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 maximize their savings and secure long-term health coverage. Royal Sundaram is committed to helping families benefit from this GST relief and offering affordable health insurance options. To learn more, individuals can visit Royal Sundaram’s official website and secure their family’s future today.