Health Insurance Premium Collections Grew 29.7% After GST Exemption, Government Tells Lok Sabha
health Insurance Premium: The government told the Lok Sabha that individual health insurance premium collections grew 29.7% in the six months after the GST exemption
Health insurance premiums may seem like an expense today, but they can protect your savings when medical emergencies strike.
New Delhi: Health Insurance Premium collections for individual health insurance policies, including family floater plans, grew 29.7% in the October 2025-March 2026 period, up from 7% growth recorded in the same period a year earlier, the government told the Lok Sabha on July 27, 2026, in response to a question on the impact of the GST exemption on insurance premiums.
The disclosure was made by Minister of State for Finance Pankaj Chaudhary in a written reply to an unstarred question raised by Bharatiya Janata Party MP Dushyant Singh, who had asked the Ministry of Finance to detail the impact of the GST exemption decision on insurance coverage in the country and whether the benefits were being passed on to consumers.
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Health Insurance Premium: Background of the exemption
The GST Council, at its 56th meeting held on September 3, 2025, recommended granting GST exemption on all individual life insurance policies and all individual health insurance policies, including family floater policies, along with re-insurance of these policies. The GST Council is a constitutional body comprising members from both the Union and State and Union Territory governments.
Following the Council’s recommendation, the exemption on individual life and health insurance policies, including family floater policies and their re-insurance, was notified via Notification No. 16/2025-CTR dated September 17, 2025. The exemption came into force from September 22, 2025.
In the written reply, the minister stated that the rate changes align with the government’s vision of “Insurance for All by 2047” by making individual life and health insurance more affordable.
Health Insurance Premium collection data
The government presented data comparing premium collection growth for the October-March period across two financial years. For individual life insurance, premium collection grew 11.2% in October 2025-March 2026, compared to 7.7% in October 2024-March 2025. For individual health insurance, including family floater policies, premium collection grew 29.7% in October 2025-March 2026, compared to 7% in October 2024-March 2025.
The minister stated that the impact of the exemption can be assessed from this percentage growth in insurance premium collection recorded after September 22, 2025.
growth in 2025-26, with health insurance premiums
Health Insurance Premium: Monitoring of benefit pass-through
In response to the second part of the question, on whether the government has taken steps to ensure the exemption benefit reaches consumers, the reply stated that the Department of Financial Services convened a meeting immediately after the exemption was notified. The meeting included senior officials of the Insurance Regulatory and Development Authority of India (IRDAI), chairmen and managing directors of public sector insurance companies, chief executive officers of leading private sector life and non-life insurance companies, and officials from the Life Insurance Council and the General Insurance Council. The stated purpose of the meeting was to ensure that the benefits of the exemption would be fully passed on to both existing and prospective policyholders.
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The reply further stated that IRDAI, as the insurance regulator, conducted its own meetings with chief executive officers and appointed actuaries of insurance companies to sensitise them on ensuring the GST exemption benefits were passed on to policyholders.
According to the reply, IRDAI received confirmation from all general, health, and life insurance companies in January 2026 that they had not revised premiums on account of the GST exemption, and that the relief granted by the government had been passed on to policyholders.
Health Insurance Premium: Input Tax Credit implications
On the third part of the question, concerning the implications for insurers with regard to claiming Input Tax Credit (ITC), the reply stated that insurers are required to reverse the ITC attributable to the now-exempt supplies of individual life and health insurance policies. The reply stated that despite this requirement to reverse ITC, insurance companies confirmed to the government that they did not increase premium rates following the exemption.
The reply was tabled in the Lok Sabha as Unstarred Question No. 1323, answered on July 27, 2026, corresponding to Shravana 5, 1948 (Saka calendar).
