Zero GST Health Insurance

Imagine saving thousands of rupees annually on your health insurance premiums. Starting September 22, 2025, individuals will benefit from a major financial relief—the removal of Goods and Services Tax (GST) on health insurance policies. This groundbreaking update means policyholders will no longer pay the 18% GST that previously applied to premiums. Whether you are purchasing a new plan or renewing your existing policy, this change is set to make health insurance more affordable and accessible for millions across India.

What is 0% GST health insurance?

Zero GST health insurance refers to policies where the GST component on premiums has been completely removed. Previously, health insurance premiums were subject to an 18% GST, significantly increasing the overall cost. With the latest GST exemption, policyholders only pay the base premium, making health insurance more affordable.

Think of it like buying a product where taxes are no longer added to the price—what you see is what you pay. This update applies to individual, family floater, and senior citizen health insurance plans, among others.

On September 22, 2025, the Government of India announced a historic reform by exempting health insurance premiums from GST (Goods and Services Tax). This landmark decision is aimed at reducing the financial burden on individuals and families while improving access to quality healthcare through affordable insurance.

Key Highlights of the GST Exemption on Health Insurance

Effective date

• The exemption came into force immediately on September 22, 2025.
• Any premium payments made on or after this date will not attract GST.

Scope of applicability

• The exemption covers individual health insurance policies as well as family floater health insurance plans.
• Both new policy purchases and eligible existing policies renewed after the effective date will benefit.

Renewals covered

• Policyholders renewing after September 22, 2025, will automatically be exempted from paying GST.
• For ongoing long-term policies where premiums were paid in advance, the exemption will apply to the installments due post this date.

Financial impact on policyholders

• Earlier, health insurance premiums attracted 18% GST, which significantly increased the overall cost of coverage.
• With this exemption, individuals can now save a substantial amount annually, especially on high-value policies. For instance, a policy premium of Rs. 25,000 earlier cost Rs. 29,500 after GST. Now, it will cost only ₹25,000, making health insurance more affordable.

Government’s intent

• This reform is designed to encourage more people to purchase health insurance as a safeguard against rising medical expenses.
• It aligns with the government’s broader vision of promoting universal health coverage and reducing the out-of-pocket burden on households.

Industry implications

• The insurance sector is expected to see a surge in demand as affordability improves.
• Experts predict higher penetration in tier-2 and tier-3 cities, where cost was a primary deterrent.
• This move also brings health insurance on par with essential services like education and healthcare, many of which are already GST-exempt.

What this means for you

• If you are planning to buy a new health insurance policy, the premium you see is the final amount, with no GST added.
• If your renewal is due after September 22, 2025, you will automatically enjoy the benefit of lower premiums.
• For families, this could mean savings of thousands of rupees annually, which can be redirected towards other healthcare or wellness needs.

Zero GST health insurance policies offer a range of features that ensure comprehensive coverage without the added tax burden. Some notable features include:

• Affordable premiums: Save up to 18% on your health insurance costs.
• Wide coverage options: Choose from sum insured options ranging from Rs. 10 lakh to Rs. 50 lakh.
• Cashless treatments: Access cashless healthcare at over 10,000 network hospitals across India.
• Pre-and post-hospitalisation cover: Enjoy financial relief for expenses incurred before and after hospitalisation.
• Tax benefits: Continue to claim deductions under Section 80D of the Income Tax Act.

The GST exemption on health insurance policies brings several benefits to policyholders:

• Cost savings: With GST removed, premiums are now significantly lower, making health insurance more affordable. For example, if your annual premium was Rs. 25,000, you would save Rs. 4,500 due to the GST exemption.
• Improved accessibility: More individuals can now afford comprehensive health coverage.
• Encourages financial planning: Lower premiums enable families to invest in higher coverage plans.
• Simplified renewals: Existing policyholders automatically benefit from the GST removal during renewals.

Comparison: Health insurance before and after GST exemption

Impact of 0% GST exemption on health insurance for policyholders

The removal of GST has a direct positive impact on policyholders:

• Lower financial burden: Families can save thousands of rupees annually.
• Increased coverage options: Reduced costs allow individuals to opt for higher coverage plans.
• Encourages insurance adoption: More people are likely to purchase health insurance, ensuring better financial preparedness for medical emergencies.

Who can avail 0% GST health insurance policies?

Zero GST health insurance policies are available to:

• Individuals: Those purchasing health insurance for themselves or their families.
• Families: Family floater plans covering multiple members under a single policy.
• Senior citizens: Special plans designed for older adults.

Eligibility criteria to avail 0% health insurance policy

To avail zero GST health insurance, you must meet the following eligibility criteria:

• Age: Most policies cover individuals aged 18 to 65 years, with senior citizen plans extending up to 75 years or more.
• Policy type: Ensure your chosen policy is eligible for GST exemption.
• Renewal date: Renewals after September 22, 2025, automatically qualify for the exemption.

How to buy health insurance online

Purchasing health insurance online is quick and hassle-free. Follow these steps:

1. Compare plans: Use platforms like Bajaj Finserv to compare zero GST health insurance policies. Get quotes from leading insurers instantly.
2. Select coverage: Choose a plan that meets your healthcare needs and budget..
3. Fill application: Provide your details, including age, income, and health history.
4. Make payment: Pay the premium online and receive your policy instantly.

Documents required for health insurance

You will need the following documents to purchase health insurance:

• Identity proof: Aadhaar card, PAN card, or voter ID.
• Address proof: Utility bills, passport, or rental agreement.
• Age proof: Birth certificate or school leaving certificate.
• Medical history: Reports for pre-existing conditions, if applicable.

How to buy health insurance policy from Bajaj Finserv

Bajaj Finserv simplifies the process of buying zero GST health insurance policies. Here is how:

• Explore plans: Visit the Bajaj Finserv website to compare policies from top insurers.
• Customised options: Choose plans tailored to your specific needs, including individual, family, and senior citizen plans.
• Paperless process: Complete the application online with minimal documentation.
• Instant approval: Get your policy approved and issued instantly.

Conclusion

The zero GST update on health insurance premiums is a game-changer for policyholders across India. By removing the 18% GST, the government has made health insurance more affordable, encouraging broader adoption and better financial preparedness for medical emergencies.

Bajaj Finserv empowers you to explore and compare zero GST health insurance policies from leading insurers, ensuring you find the best coverage at the most competitive price. Take advantage of this opportunity to secure your health and financial future without unnecessary tax burdens.

Check premium on health insurance plans today with Bajaj Finserv and start saving on premiums!