Bengaluru: For 72-year-old Rekha R, health insurance was a heavy expense. A Rs 10 lakh cover meant an annual premium of Rs 1 lakh with the GST component alone being a staggering Rs 18,000. Bengaluru resident Geetanjali Kapoor faced a similar pinch while insuring her 87-year-old mother, paying nearly Rs 80,000 in premium, of which over Rs 12,000 was tax.Households like theirs could see a significant cut in costs from Sept 22 when GST on life and health policies drop to zero. Health, term life, ULIPs, and endowment plans could all be cheaper, but senior citizens, who pay the steepest premiums, stand to benefit the most. Insurers and hospital groups say the exemption can widen access and push penetration in a market where only 41% of households currently have some form of cover. Dr Devi Shetty, chairman and founder, Narayana Health, said: “It will encourage adoption and savings, and allow new products in the low-cost segment. We are launching a plan for gig workers and domestic help, offering Rs 1 crore surgical cover for Rs 5,999.” Vishal Bali, executive chairman, Asia Healthcare Holdings, pointed to gaps in both health and life cover. He said lower GST on diagnostic kits will also support preventive care. Insurers are projecting broader benefits. Naveen Chandra Jha, MD and CEO, SBI General Insurance, said the change would help families take a crucial step toward financial and medical security and speed up the push for ‘Insurance for all by 2047′. Gaurav Dubey, founder and CEO, Livlong 365, said the tax burden often discouraged first-time buyers. “By removing this levy, the govt has opened doors for wider adoption, especially in smaller towns,” he said. Saurabh VijayVergia, founder and CEO, CoverSure, said the move tackles affordability, but insurers must still build trust and improve access. India’s insurance penetration remains at around 4% compared with a global average of over 7%. GST exemption is expected to provide meaningful relief while nudging more households to secure cover.
