Zero GST on Life Insurance

For years, life insurance premiums in India carried an additional 18% GST, often making policies feel costlier for households already managing tight budgets. Effective from September 22, 2025, the Central Government announced GST will not be applied on life insurance premiums, delivering much-needed relief to policyholders. This step not only reduces the overall cost of coverage but also makes financial protection more accessible to a wider section of society. By paying only the base premium, individuals and families can now secure long-term life cover at a lower cost, encouraging broader adoption of insurance as a key tool for financial planning and future security.

What is 0% GST Life Insurance?

Zero GST life insurance refers to policies where premiums are no longer subject to Goods and Services Tax. Earlier, if your premium was Rs. 10,000, you actually paid Rs. 11,800 after GST. Now, with the government’s exemption, you only pay the base premium.

This applies across term plans, ULIPs, endowment policies, and even riders. The Central Government’s move ensures life cover is more affordable for all income groups, subject to applicable terms and conditions.

Explore and compare eligible plans to take advantage of the GST savings while securing your family’s financial future. Low premiums, high coverage, tax benefits and peace of mind – life insurance comes with a wide range of benefits. Explore plans and get quote!
 

Latest GST update about zero GST on life insurance policies, 2025
 

In its 2025 announcement, the Central Government introduced a complete GST exemption on life insurance. Here’s what it means for you:
 

• GST scrapped on premiums: 

You pay only the base amount, with no added 18%.

• Applicable across major policy types: 

Term insurance plans ULIPs, endowments, group insurance.
 

• Direct relief to policyholders: 

Lower costs and higher affordability.
 

• Promotes financial inclusion: 

More Indians can now access insurance protection.
 

This reform reflects the government’s focus on making financial security a reality for every household.

The Central Government’s decision to reduce GST on life insurance premiums from 18% to 0% has completely changed how people view insurance affordability. Let’s look at the key features that make this reform so impactful:

• Affordable premiums: 

With GST removed, policyholders now pay only the base premium. For instance, if your annual premium is Rs. 20,000, earlier you paid Rs. 23,600 after GST. Now, you pay just Rs. 20,000—saving Rs. 3,600 each year.

• Wide applicability: 

This benefit extends across all policy types—term plans, ULIPs, endowment policies, whole life covers, and even riders like accidental death or critical illness. Whether you are protecting your family, planning retirement, or building wealth, you pay zero GST.

• Simplified buying process: 

Earlier, people often got confused about base premium vs. GST-added premium. The reform has made things straightforward—what you see is what you pay, whether buying online or offline.

• Transparent costs: 

No more hidden charges. Policyholders gain more trust in insurance products since there is no extra tax inflating the cost.
 

By making premiums affordable, applicable across policies, and easy to understand, this reform ensures life insurance is accessible, fair, and transparent for everyone.

Ready to explore your options? Compare GST-free plans and secure your future today! Get quote!

Key benefits of life insurance without GST
 

The elimination of GST on life insurance is not just a technical tax reform—it brings real, everyday benefits to policyholders.
 

• Significant cost reduction: 

Earlier, premiums felt heavy because of the 18% GST. For example, a Rs. 30,000 base premium meant paying Rs. 35,400. Now, the same policy costs Rs. 30,000—saving you Rs. 5,400 every year. Over a 20-year term, that’s more than Rs. 1 lakh in savings.

• Greater affordability: 

The exemption makes insurance budget-friendly for middle-class families and young professionals. People who earlier delayed buying life cover due to cost concerns can now invest without hesitation.

• Encourages protection planning: 

With lower premiums, more households can take comprehensive cover including term plans, riders, or wealth-building policies like ULIPs. This supports the Central Government’s mission of improving financial inclusion.

• Boosts savings potential: 

The money you save on GST can now be diverted towards other goals—be it retirement planning, children’s education, or even building an emergency fund. It’s like an automatic reinvestment opportunity without additional effort.

Overall, the exemption transforms life insurance into a value-rich financial tool, helping Indians save more, protect better, and plan smarter.

The true impact of the Central Government’s 0% GST reform can be understood by comparing premiums before and after the change.

For families holding multiple policies, the savings multiply over time. For instance, a household paying three premiums totaling Rs. 75,000 annually would have spent Rs. 88,500 earlier. Now, they save Rs. 13,500 each year—amounting to nearly Rs. 2.7 lakh over 20 years.

This comparison also shows how the reform improves accessibility. By reducing entry costs, first-time buyers and lower-income households find insurance more affordable. It directly supports India’s financial inclusion agenda, ensuring more citizens get life cover without feeling burdened by taxes.

Ultimately, the GST exemption allows families to focus on choosing the right coverage, rather than worrying about inflated premiums.

See the difference zero GST can make for your premiums. Explore life insurance plans now – Get quote!

Impact of 0% GST implementation on life insurance for policyholders

The Central Government’s move has impacts that go beyond premium savings. It reshapes the insurance landscape in multiple ways:

• Affordable for all segments: 

The reform particularly benefits middle-class and salaried families, who form the largest segment of policy buyers. Lower costs mean higher affordability across cities and towns.

• Encourages insurance adoption: 

Insurance penetration in India has been relatively low compared to global standards. By removing GST, the government has created a powerful incentive for more people to purchase life insurance.

• Better financial planning: 

Without the extra tax burden, families can now plan premiums more easily into their long-term budgets. Whether for 10 years or 20 years, the costs remain predictable and stable.

• Increases insurance penetration: 

The reform is aligned with the government’s larger mission of ensuring wider financial security. More people getting covered means stronger household resilience in the long run.

In short, the 0% GST policy impacts not just individual savings but also India’s overall insurance ecosystem, making protection more mainstream and accessible.

The GST exemption applies universally, ensuring that everyone in India can benefit from affordable life cover.

• All Indian residents are eligible: 

Individuals across age groups, professions, and income brackets can avail GST-free premiums. Whether you’re a salaried employee, self-employed, or a homemaker, the benefit applies equally.

• Families and individuals: 

Single policyholders or those buying policies for dependents—like spouses or children—can both benefit from the exemption.

• Corporate group plans: 

Employers purchasing group life insurance for their staff will also see reduced costs, making it easier for organisations to provide coverage to employees.

• Applies across products: 

From pure protection term plans to investment-oriented ULIPs and traditional endowment policies, the 0% GST feature applies to all. Even riders and add-ons are covered under this benefit.

This universal coverage makes the reform one of the most inclusive steps by the Central Government in recent years, ensuring life insurance is accessible to every household in the country.

Discover plans tailored for all Indians. Get quote in seconds!

Eligibility criteria for zero GST life insurance

To take advantage of the Central Government’s move, here’s what’s required:

• Age: Based on insurer guidelines.
• Residency: Must be an Indian citizen.
• Documents: Aadhaar, PAN, voter ID, etc.
• Financial proof: For ULIP or high-value policies.

Documents required for life insurance without GST

To apply for your GST-free policy, keep these documents ready:

• Age proof: Aadhaar, passport.
• Identity proof: PAN, voter ID.
• Address proof: Utility bill, driver’s licence.
• Income/medical records: If applicable.

Gather simple documents and secure your GST-free policy—start today! Explore life insurance plans online and get quote for a plan that suits your budget and needs.

How to buy 0% GST life insurance online?

The Central Government’s exemption on GST makes life insurance more affordable and easier to buy than ever. Here’s a simple step-by-step guide to get started:

• Visit the insurer’s website or trusted aggregator: 

Head over to your preferred life insurance company’s official website or a reliable comparison platform. Look for the option to Get Quote or Buy Now.

• Enter basic details: 

Fill in details like your name, age, gender, income, and contact number. This helps the platform personalise plans suited to your coverage needs.

• Verify your mobile number or email: 

A quick OTP verification ensures the security of your information and keeps you connected with the insurer for future updates.

• Choose your coverage and policy type: 

Decide on the sum assured, policy type (term, ULIP, endowment, or whole life), and policy tenure. This is the most important step, so choose based on your financial goals.

• Customise with riders: 

Add riders like accidental death, critical illness, or waiver of premium for enhanced protection—remember, these too are now GST-free.

• Get your instant premium quote: 

The system shows the premium payable without any GST added. What you see is exactly what you’ll pay.

• Make payment securely online: 

Pay using net banking, UPI, debit/credit card, or wallet options. Once payment is done, your policy documents are shared digitally.

That’s it—you now have GST-free life insurance in just a few clicks!

How to buy a life insurance policy through Bajaj Finance Insurance Mall?

Applying for term insurance plans through Bajaj Finance Insurance Mall is easy, as you need to follow only a few simple steps to get quote based on your requirements. Here’s how:

Step 1: Click on Get Quote

Click on Get Quote. You will be asked to enter your mobile number so we can send you a one-time password (OTP).

Step 2: Enter the OTP

Check your phone for the OTP and type it in when prompted. This helps us verify it is you.

Step 3: Fill in your details

Once the OTP is confirmed, you’ll see our application form pop up.

• If you are an existing user, some of your details might already be filled in.
• If you are new, just enter your name, gender, date of birth, email ID, and PIN code.

Do not forget to tick the checkboxes to proceed.

Step 4: Choose your plan

You will now be redirected to our partner’s page. This is where you can:

• Select the coverage amount
• Choose the policy tenure
• Pick your payment type
• Decide how much you want to invest

Once everything looks good, you can go ahead and complete your purchase.

Conclusion

The zero GST update on life insurance is a transformative step towards making financial protection more affordable and accessible. With reduced premiums, simplified processes, and enhanced affordability, now is the perfect time to invest in life insurance. Bajaj Finance Insurance Mall offers a seamless platform to compare and purchase life insurance policies, ensuring that you get the most suitable coverage for your needs.

Compare plans, calculate premiums, and secure your life cover all in a few clicks – Get quote!