This year, major tax reforms are giving Indian households a much-needed break, particularly the removal of GST on individual health and life insurance premiums. At the same time, medical inflation is soaring: healthcare costs in India are expected to rise by around 13% in 2025, outpacing the global average.
With out-of-pocket expenses still high for many families, tax relief plus rising costs make 2025 a great opportunity to secure a health insurance policy. Let's explore why acting now is smart.
Benefits of Buying a Health Insurance Policy in 2025
Lower Premiums Thanks to Tax Reforms
From 22 September 2025, the government
removed the 18% Goods & Services Tax (GST) on individual health insurance premiums. This means if your annual premium was ₹15,000 with 18% GST (~₹2,700 extra), you now pay about ₹15,000 without the extra tax.
While insurers may adjust base premiums, the tax relief still makes coverage more affordable. So buying now means you lock in a better value.
Better Flexibility and Product Features
Insurance companies are offering more senior-friendly and flexible plans in 2025. Options like higher sum insured, top-up covers for large treatments, lower waiting periods for certain illnesses, and online platforms are available for easy buying and claims. This makes it simpler for everyday individuals and families to get the right protection without complicated procedures.
Rising Inflation
Healthcare costs are rising fast in India. Medical expenses are projected to increase by about
13% in 2025, higher than the global average of 10%. So, if you delay buying health insurance, the same treatment could cost significantly more later. For example, if a major surgery cost ₹2 lakh in 2024, a 13% rise means it could cost about ₹2.26 lakh in 2025. Having insurance today can lock in lower premiums and protect you from paying extra.
Modern Treatment Options
Today's medical treatments are more advanced such as robotic surgery, advanced imaging, specialised therapies, but they often come with higher prices. Health insurance gives you access to these latest treatments without having to exhaust your savings. For instance, a treatment that wasn't commonly available a few years ago may now cost ₹3-4 lakh; being insured means your financial risk is reduced.
Increase in Lifestyle Diseases
Diseases like diabetes, hypertension, heart disease and obesity are becoming more common in India. This means more people are needing hospitalisation or specialist care. Health insurance helps you prepare for such cases rather than being caught off guard. Say you're diagnosed with a condition in your 40s or 50s - an insurance plan purchased earlier can help you manage costs and treatments over time, rather than facing large bills when you're older.
Tips to Buy the Right Health Insurance at the Right Time for Young Indians
If you're in your 20s or early 30s, now is the best time to lock in an affordable, long-term health insurance policy. Follow these steps to get it right:
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Start Now - Don't Wait for a Health Scare: Go to your insurer's website or a comparison portal today. Explore plans made for your age bracket (25-35 years). Premiums for young buyers can be 30-50% lower than for those in their late 30s - and you stay covered from day one.
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Choose Coverage of at Least ₹10–₹15 Lakh: In metro cities, a single hospitalisation can easily cost ₹3-5 lakh. Pick a base policy of ₹10 lakh and add a super top-up to extend it up to ₹25 lakh affordably.
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Check the Cashless Hospital Network Before Buying: Use the insurer's online hospital locator to ensure they have cashless hospitals near your home, workplace and hometown - this saves you from paying out-of-pocket.
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Compare and Customise Online: Use IRDAI-approved portals to compare coverage details like room rent limits, day-care procedures, pre/post-hospitalisation benefits, and claim ratios. Choose what fits your needs instead of simply going for the cheapest plan.
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Pick Add-ons Smartly: Add
critical illness cover or accidental cover if you have a family health history or travel frequently. Similarly, all the other add-ons like the consumables cover, reduction in waiting period, etc., offer unique benefits. So choose those that will benefit your case.
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Review Every Two Years: Once your salary or family size grows, upgrade your sum insured or convert to a family floater plan for seamless coverage.
Conclusion
With GST reforms, health insurance policies have become more accessible for Indians. Whether you are a young individual buying your first health insurance plan or in your 30s-40s, wanting to upgrade your plan, there is no better time than this. Zero GST on premiums gives you an opportunity to select more comprehensive coverage, better add-ons or lets you invest elsewhere.
So, start early and invest in your future with Reliance
Health Insurance. We offer flexible coverage options for individuals, families, groups and senior citizens. With us, you can select plans that offer up to ₹5 crore* coverage, unlimited restore benefits, carefully curated 20+ add-ons*, along with a 99.57% claim settlement ratio*, ensuring easy settlement.
FAQs
What is a growing trend in health insurance policies in 2025?
Health insurers are more focused on having a customer-centric approach, designing plans with policyholders at the centre. This means better products for you, quick and expert guidance, and flexible and accessible care.
Which health insurance is best in India in 2025?
Looking at the shift of demographics, increasing healthcare costs and medical advances, the best health insurance policies are those that offer high sum insured options, such as up to ₹5 crores* advanced features, such as global coverage, modern treatments cover and add-ons that let you enhance the coverage as per individual needs.
At
Reliance General Insurance, we understand every individual has different needs, and thus, we offer diverse policies tailored to cover your needs.