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Term Life Insurance that Welcomes Change

1 Crore Term Insurance Starting @ ₹18/day*

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18% Cheaper Now - Zero GST

Get instant savings with zero extra charges.

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99.29% Claim settlement ratio*

Proven reliability your family can count on.

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Save up to ₹54,600* on your taxes

Earn smart tax benefits while you protect.

ARN: L0130 | *T&C Apply
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Home>Life Insurance>Term Insurance>

Zero GST on Term Insurance

Zero GST on Term Insurance

From 22 September 2025, individual term insurance premiums will no longer attract GST. Earlier, policyholders had to pay 18% GST on term plans, which made premiums higher. With the new update, the GST rate is cut from 18% to 0%, making financial protection much cheaper and easier for families.

Quick Links

  • What is GST on Term Insurance Premiums?
  • Why Was GST Removed?
  • Impact of GST Removal on Families
  • New GST Structure
  • Conclusion
  • FAQs

What is GST on Term Insurance Premiums?

GST on term insurance premiums is the tax charged on your policy premium under the Goods and Services Tax system. GST on term insurance premiums was earlier set at 18%; however, from 22 September 2025, you won’t have to pay GST on term insurance. That’s the real benefit of zero GST term insurance in 2025.

Let’s take a simple example:

  • Base premium = ₹12,000
  • Earlier cost with 18% GST = ₹14,160
  • New cost with 0% GST

Over a 20-year plan, that’s more than ₹40,000 saved. That’s the clear benefit of zero GST term insurance.

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Why Was GST Removed from Term Insurance Premiums?

The government removed GST on term insurance to make financial protection easier for everyone. Here are the main reasons:

1. To Make It Affordable

Earlier, the 18% GST made premiums higher. A plan that cost ₹10,000 became ₹11,800 with tax. With Zero GST on term insurance, the amount you pay now goes only toward your cover, not extra charges. This makes it easier for young families and middle-class households to buy protection.

2. To Encourage More People to Buy Term Insurance

The idea behind No GST on term insurance is simple: life cover should be affordable, transparent, and within reach of more Indians. Removing GST reduces the barrier of cost and motivates more people to secure their families.

3. To Improve Insurance Penetration and Financial Inclusion

India has low insurance penetration compared to many countries. By removing GST, it encourages wider adoption and better financial security for families. 

How Does GST Removal on Term Insurance Premiums Affect Families?

The removal of GST on term insurance is great news for families. It makes protection simpler, cheaper, and more accessible. Here’s how it helps everyday families:

Lower premiums

With Zero GST on term insurance, you save thousands of rupees every year.

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Easier to buy

More families can now afford protection. It also encourages first-time buyers to start their financial journey with term insurance.

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Long-term savings

Over the years, these savings add up to a large amount, making term insurance one of the most cost-effective ways to secure your family.

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What Will Be the New GST Structure for Term Insurance?

The new GST rule will start from 22 September 2025.

Eligible

Individual term insurance policies. If you buy a new term plan or renew after this date, it will be term insurance GST free from September 2025.

Not eligible

Group covers, employer-sponsored policies, or corporate term plans remain outside this benefit.

Conclusion

The removal of GST on term insurance is a big step for families in India. With zero GST on term insurance, families can now put their money fully toward cover instead of tax, and over time, the savings add up to a big amount. This change makes term insurance one of the most affordable and value-for-money ways to secure your loved ones. If you’ve been considering term insurance, the GST change makes it easier to take that step toward protecting your loved ones.

FAQs on GST and Term Insurance

Yes. From 22 September 2025, all individual term insurance premiums will be GST-free.

No. The exemption does not change tax rules. Under the old tax regime, you can still claim deductions under Section 80C and enjoy tax-free payouts under Section 10(10D).

Individual term insurance plans get this benefit. This makes term insurance more affordable and ensures that the amount you pay goes fully toward your coverage.

Earlier, there was an 18% GST on term insurance, which made premiums more expensive. For example, a ₹20,000 premium turned into ₹23,600 after GST.

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Neviya Laishram profile avatar

Written by

Neviya Laishram

Sr. Content Editor

Vaibhav Kumar Kaushik profile avatar

Reviewed by

Vaibhav Kumar Kaushik

Senior Director – Life Insurance Strategy

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ACKO Technology & Services Private Limited
CIN: U74110KA2016PTC120161
The use of images and brands are only for the purpose of indication and illustration.
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All resources
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Comprehensive car insurance
Zero depreciation car insurance
Car insurance calculator
Car insurance check
Pay as you drive car insurance
Bike
Bike insurance
Third party bike insurance
Bike Insurance calculator
Check bike insurance validity
Scooter insurance
Used bike insurance
Comprehensive bike insurance
EV bike insurance
Own damage bike insurance
Vehicle services and more
Check & pay e-challan
Check vehicle details
Check vehicle PUC status
Recharge FASTag
Check RC status
Health, life, and other services
Health
Health insurance
Health insurance plans for family
Health insurance for parents
Health insurance premium calculator
Health insurance for senior citizens
80D Deduction
1 crore health insurance
Super top up health insurance
Mediclaim policy
Cashless health insurance
50 lakh health insurance
Critical illness health insurance
Compare health insurance plans
Waiting period in health insurance
Life
Life insurance
Term insurance
Term insurance tax benefit
1 crore term insurance
Term insurance calculator
Term insurance for single parents
Term insurance for senior citizens
Affordable term insurance
Critical illness rider life insurance
Accidental death benefit rider In life insurance
Disability income rider
Best term insurance in India
Best life insurance
Group health insurance
Employee health insurance
Group health insurance add-ons
Maternity cover in group health insurance
Group personal accident insurance
Group health insurance for startups
Corporate health insurance
Other services
ABHA
HLV calculator
Will creation service
Health card
ABDM
Ayushman card apply
Abha card registration
Rent receipt generator
Travel
Travel insurance
International travel insurance
Schengen travel insurance
Travel insurance for Dubai
Travel insurance for Thailand
Travel insurance for USA
Enterprise
Health insurance for gig workers
Loan protection for fintechs
Group travel insurance
Auto insurance partnership
Electronic device insurance
Health insurance for corporates
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CIN: U74110KA2016PTC120161
The use of images and brands are only for the purpose of indication and illustration.