The Morning Brief Will GST-Free Insurance Truly Cut Your Premiums?
Sep 11, 2025
Kamlesh Rao, MD & CEO of Aditya Birla Sun Life Insurance, Nilesh Sathe, former Member of IRDAI, and Bhabatosh Mishra, COO of Niva Bupa Health Insurance, delve into groundbreaking changes in India's insurance landscape. They discuss the recent removal of the 18% GST on health and life insurance premiums and its potential impact on consumer costs. The trio explores whether these savings will truly reach policyholders and how the shift could boost insurance penetration, shaping a future where coverage is accessible for all.
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Cheaper Protection Is The Main Win
- Removing GST on individual life and health premiums will make protection notably cheaper, especially term policies.
- Kamlesh Rao says the government's move aligns with the goal of "insurance for all by 2047" and cuts costs significantly.
GST Alone Won't Fix Low Penetration
- Eliminating GST can raise insurance penetration but won't be sufficient alone.
- Nilesh Sathe stresses distribution expansion and more agents are also needed to grow coverage.
Input Tax Credit Limits Full Pass-Through
- Insurers aim to pass maximum benefit to customers but losing input tax credit complicates full transmission.
- Kamlesh Rao notes some servicing and distribution costs still attract GST, limiting the pass-through.