GST on Insurance in India (2026): Health & Life Now Exempt
A landmark GST 2.0 change: individual and family health and life insurance premiums are now GST-exempt (0%), down from 18%. Group and employer-provided plans remain at 18%. Here's what applies.
Part of: The Complete GST Guide for Small Business in India (2026)
One of the most talked-about GST 2.0 reforms: from 22 September 2025, GST on individual life and health insurance premiums dropped from 18% to zero. For a family buying cover, that's an immediate ~18% saving on premiums. Here's exactly what's exempt and what still carries GST.
Quick answer: individual & family health and life insurance premiums are now 0% GST (were 18%). Group/employer plans remain 18%.
Insurance GST rates at a glance
| Policy type | GST rate |
|---|---|
| Individual life insurance (term, endowment, ULIP) | Nil (exempt) |
| Individual & family-floater health insurance | Nil (exempt) |
| Senior-citizen health cover | Nil (exempt) |
| Group life / group health (via employer) | 18% |
| General insurance (motor, fire, travel, etc.) | 18% |
Why it matters
At 18%, a ₹20,000 health premium carried ₹3,600 of GST. At 0%, the customer pays only the premium. The exemption targets individual and family protection; group covers arranged by an employer, and general (non-life, non-health) insurance like motor and travel, remain taxable at 18%.
FAQs
Is motor insurance GST-free now?
No. The exemption applies to individual life and health insurance. Motor, travel, fire and other general insurance continue at 18%.
General information only, not tax advice; rules can be revised. Confirm the current treatment for your specific policy on CBIC/IRDAI notifications or with your advisor. Last reviewed: September 2026.
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