Some insurance and online brokers have begun offering GST-less premiums to Indians, nearly two weeks ahead of the goods-and-services-tax reforms coming into play. The reforms, which include GST being reduced from 18% to 0% on health and life insurance plans.
This implies that those Indian households eyeing to secure themselves in the face of life's uncertainties at a cheaper, more affordable rate do not have to wait for Sept. 22.
To clarify, the policies purchased right now will be issued on Sept. 22 with no GST levied at the time of purchase. The amount of the purchase is merely the base premium.
Anand Roy, chief executive officer of Star Health and Allied Insurance, spoke about the GST exemption on health insurance premiums told MoneyControl that GST exemption on health insurance premiums is a landmark reform while adding, "Starting now, customers can buy policies without paying GST, with coverage beginning from September 22. Health insurance is a necessity, not an optional expense"
Besides Star Health, Policybazaar is also one of the insurers providing early benefits of GST reforms to buyers.
Fall in premium prices will endorse families and customers to opt for higher sums insured. This move comes under the Indian government's vision — "Insurance for All by 2047."
Input Tax Credit may raise costs for insurers due to loss of input tax credit, households will see a major improvement in terms of affordability.
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