GST reforms:
0% GST on individual health and life insurance; reduced from 18%

New Delhi, Sep 3, 2025

Individual health and life insurance has been made GST free, finance minister Nirmala Sitharaman announced on Wednesday. It comes as a big relief as the rate has been brought down from 18%.

"Insurance services from 18% currently will go into two, three different categories. Exemption of GST on all individual life insurance policies, whether term life, ULIP, or endowment policies, and reinsurance thereof, to make insurance affordable for the common man and increase the insurance coverage in the country," Sitharaman said.

"Exemption of GST on all individual health insurance policies, including family floater policies and policies for senior citizens, and reinsurance thereof to make insurance affordable for the common man and increase the insurance coverage in the country," she added.

Speaking after the 56th GST council meeting, Sitharaman said, "These reforms have been carried out with a focus on the common man. Every tax on the common man's daily use items has gone through a rigorous review and in most cases the rates have come down drastically... Labour intensive industries have been given a good support. Farmers and the agriculture sector, as well as the health sector, will benefit. Key drivers of the economy will be given prominence."

[The Times of India]