GST Exemption on Insurance: Analysing the Impact Six Months On

On September 22, 2025, the Government of India granted GST exemption on all individual life insurance policies and health insurance policies (including family floater), along with reinsurance. The removal of the 18% GST was one of the most significant policy interventions in the insurance sector in recent years.

Immediate Impact

The impact was pronounced and almost immediate. IRDAI's data shows that the health insurance segment recorded a growth rate of 14.41% up to January 2026, with standalone health insurers posting 17.89% growth.

For life insurance, the GST exemption reduced the effective premium cost for policyholders, making protection and savings products more affordable. The individual NBP growth rebounded strongly to 17.0% in H2 FY2026.

Sources: ICRA Insurance Sector Report (April 2026), IRDAI Data, PIB India