Now there is no tension of expensive treatment, GST Council took a big decision; Health and Life Insurance Tax-Free

GST on Life and Health Insurance: There has been a long-standing demand to reduce GST in the health sector. With the abolition of GST on health insurance, people's habit of taking life and health insurance coverage will increase.

GST on Life and Health Insurance: Union Finance Minister Nirmala Sitharaman announced several major GST reforms under GST 2.0 on Wednesday night. During this, the health sector has been given a big gift. It has been decided to make GST free on the premium charged on personal life insurance and health insurance policies. At present, GST is levied at the rate of 18 percent on health and life insurance premiums. Now, under the GST reforms, no GST will be levied on their premiums. This new rule will come into effect from September 22.

Insurance will be affordable for the common man

The Finance Minister said that with this decision taken under GST 2.0, insurance will be more affordable for the common man than before and its scope will increase further across the country. With this, all individual ULIP plans, family floater plans and term plans will be exempted from GST in future. Term life, unit linked insurance plans (ULIP) and endowment plans all come under the category of life insurance policies. Now with this new change, GST on them will become zero. Also, their reinsurance will also come under the category of zero GST.

Now only base premium will have to be paid

After this exemption under GST reforms, now customers will pay only the base premium. They will not have to pay GST separately on it. Industry experts say that this can reduce the premium of policies by about 15 percent, making them more affordable and increasing their reach to more and more people in the country. Suppose if a policyholder pays a premium of Rs 100 to buy an insurance policy, then till now he had to pay Rs 118 with 18 percent GST. Whereas now this will not happen.