WTW market update: GST exemption on Individual insurance premiums

The GST Council has approved a major reform impacting the insurance sector:

• Individual (Retail) insurance: Effective September 22, 2025, the following policies will be fully exempt from GST (18%):
• Term life insurance
• Unit linked insurance plans (ULIPs)
• Endowment policies
• Family floater health plans
• Senior citizen health policies

Note: This exemption also applies to reinsurance premiums for these products.

• Group (Corporate) insurance:
  There is no change to GST treatment for employer-sponsored/group insurance policies. As of today, no CBIC notification or circular has extended GST relief to group schemes.

Implications for clients

What this means for you?

• Retail policy holders: Expect reduced premium outflows starting September 22, 2025, as GST will no longer be levied. The GST exemption applies to all premium payments made on or after the said date. However, GST paid on earlier premiums or advance payments is non-refundable.
• Corporate clients: Continue to budget for GST-inclusive premiums on group policies until further notice.

WTW’s commitment

We are actively tracking updates from the CBIC and GST Council. Should any changes arise—especially regarding group insurance—we will notify you immediately.

Should you have any questions or need any personalised guidance or assistance, please do not hesitate to reach out to our client management team assigned to your account or write to wtwindia@wtwco.com. The WTW team is available and happy to help you.

*Source: GST Council – 56th Meeting