GST Reduction on Health and Life Insurance: Will It Be Zero?

Published By: Economic Times Wealth ​

Published Date: 17-10-2024

According to the new suggestions posted by the Group of Ministers (GoM), life and health insurance policyholders will receive financial ease. The convenor of GoMs, Mr Samrat Chaudhary, stated that every GoM member wants to provide these reliefs. Their special focus is on senior citizens' health and life insurance plans.

The group working under the GST council presents three GST suggestions. These include no GST on senior citizen health and life insurance premiums and a reduced rate to 5% from 18% for others. These reductions will greatly influence premium prices, helping policyholders.

Reliance General Insurance’s CEO, Rakesh Jain, explains its impact in a simple way that connects with the policyholders. He uses examples to display the savings if the GST suggestions go through.

He shows the amount of money one can save using figures in three different scenarios:

• a. Where there is a total GST removal on health insurance plans,
• b. Where there is a decrease in GST from 18% to 12%,
• c. Where there is a decrease in GST from 18% to 5%.​

While GST deduction benefits policyholders, it is also an important way for the government to generate significant earnings. It helps government-run healthcare programs and provides affordable treatment options for the underprivileged.

The GST council will make the final decision based on the GoM’s report. Experts anticipate that it will benefit individuals and families while balancing revenue generation.