The implementation of GST reduction must ensure better coordination for all stakeholders Photocredit: Wanan Yossingkum
Buying individual life and health coverage will be cheaper because insurance companies will be established to implement the distance of 18 percent goods and service tax (GST) on premiums from 22 September. Half a dozen insurers confirmed line that they will pass on the benefit of GST reduction to policyholders.
The insurance regulations and development authority of India (IRDAI) has also instructed insurers to pass on the full benefit of the GST exemption to policyholders.
“Customers now only have to pay the net premium amount. To guarantee maximum consciousness, we have already initiated communication activities on our social media platforms,” said KV Dipu, Senior President, Operations & Customer Service, Bajaj Allianz General Insurance.
Tarun Chugh, MD & CEO, Bajaj Allianz Life Insurance, said the company started to communicate with customers and agents about the benefits in store. Bankim Mapara, Chief Financial Officer, Universal Sompo General Insurance, said that customers only have to pay the basic premium for their health insurance policies without extra tax.
Manipalcigna’s health insurance policy will also reduce the premium because customers have to pay zero gst on their health insurance premium, said Shasank Chaphekar, Chief Distribution Officer, Manipalcigna Health. The insurers, who will lose the current benefit tax credit in a zero GST regime, will have to take a hit while accepting the full benefit of GST reduction. The insurers cannot claim ITC on GST that they pay at costs, including committees, rent and software.
Zurich Kotak General Insurance carries out tax reform by reworking its actuarial and economic models to ensure that the entire benefit is passed on to customers, according to Alok Agarwal, MD and CEO, Zurich Kotak General Insurance.
Irdai direction
In a meeting with the captains of the insurance sector on Wednesday, the insurance regulation and development authority of India (IRDAI) chairman Ajay Seth dedicated the insurers to ensure that the full benefit of this exemption is passed on to policyholders.
“This long -term demand from the insurance sector and policy has been tackled in its entirety. Now it is the turn of industry to significantly improve affordability, accessibility and availability of insurance products that are suitable for different segments of the population and economic entities,” he said,
The exemption would open a high chance of insurers to increase coverage, penetration and improve the product performance. “It is a great step in the direction of achieving universal coverage by 2047,” Seth said.
Sandep Dadia, CEO & Country Head, Lockton India, said that because the GST reduction only applies to individual health and life premiums, the business customers who offer group health or life to employees will see a direct reduction of premiums.
The impact is more indirectly due to employees to tops or company schemes that include individual policy, he added. Employees who opt for individual top-up health or life policy outside their group coverage will, for example, benefit from the reduced GST, which improves affordability and satisfaction. Similarly, in flexible benefit plans, companies that subsidize or reimburse employees for individual health or life policy can make a marginal reduction of refunds.
The implementation of GST reduction must ensure better coordination for all stakeholders. “The immediate task for companies is to re-configure it and to update accounting systems, to update product prices and to coordinate premium collection processes,” said Narendra Bharindwal, president of Insurance Brokers Association of India (Ibai). “The brokers are now focusing on training customers, clarifying premium-break-ups and helping individuals in their retail trade in their retail trade, the Ibai president.
Published on September 18, 2025
#Insurers #preparing #pass #GST #Waivers #advantage #customers