GST Exemption Fuels Sales of Health and Term Insurance: Insurers

GST Exemption Fuels Sales of Health and Term Insurance: Insurers

The article reports that the government’s decision to grant a Goods and Services Tax (GST) exemption on individual health and term life insurance premiums has successfully driven an increase in sales for these critical insurance products.

Key Impact on Sales and Affordability

• Increased Demand: Insurers have confirmed a noticeable increase in the purchase of both individual health insurance and term life coverage following the GST waiver (which removed the 18% GST component on these premiums).
• Affordability Boost: The exemption directly translated into lower premium costs for consumers, making these essential protection products significantly more affordable. The lower cost was a key factor in converting prospective buyers into policyholders.
• Focus on Protection: The sales surge is concentrated on protection-oriented products (term life and health), aligning with the industry’s goal of improving insurance penetration and enhancing financial security for individuals.

Industry Outlook

The industry views the GST exemption as a major positive step that addresses price sensitivity in the market. This fiscal relief is expected to contribute to sustained volume growth in the protection segment over the medium term.