Term Insurance Premiums Before vs After GST Reform: How Much Do You Save?

The GST reforms 2025 have brought a landmark change: no GST on term insurance premiums starting September 22, 2025. 

Until now, policyholders paid 18% GST in addition to their premiums. That extra cost often made coverage feel more expensive than it really was. 

So how much do you actually save with GST-free life insurance? Let’s break it down. 

How Much Do You Save on Term Insurance After GST Reform?

👉 The bigger your premium, the more you save in absolute terms.

Why GST-Free Term Insurance Matters

Term insurance has always been the simplest and most affordable way to protect your family’s future, and the GST exemption makes it even more valuable. 

Direct Affordability: Term insurance is already the most cost-effective way to protect your family. Removing GST makes it even more affordable. 

Transparent Pricing : What you see is what you pay. With GST removed, there’s no hidden tax or additional cost added later. 

Encourages Protection: Many families hesitated earlier because premiums looked higher with GST. The exemption lowers the barrier to buying essential cover. 

This matters because every Indian family needs a term insurance plan — it provides financial security for loved ones, ensuring they can manage daily expenses, children’s education, or outstanding loans if something were to happen to the earning member. It also offers high coverage at a low cost, often allowing you to secure a large sum assured (like ₹1 crore) for a modest premium. Beyond that, it acts as a shield against debt, preventing liabilities like home or education loans from burdening your family. Most importantly, it brings peace of mind, knowing your dependents will remain financially secure. 

Conclusion 

The GST exemption on life insurance premiums makes protection more affordable than ever. For families, this means lower costs, greater transparency, and stronger financial security. 

And while the savings matter, the bigger picture is this: 
Every Indian family needs a term insurance plan to ensure financial stability in uncertain times. With GST removed, there’s never been a better moment to invest in your family’s future. 

FAQs on GST and Term Insurance 

Q1. What is the GST rate on term insurance premiums in 2025? 

From September 22, 2025, GST on term insurance premiums is 0%. 

Q2. How much can I save on my premium after GST exemption? 

You save 18% annually. For a ₹50,000 premium, that’s ₹9,000 saved each year. 

Q3. Does the GST exemption apply only to term insurance? 

No. It applies to all life insurance products, including ULIPs and guaranteed savings plans. 

Q4. When will the GST exemption take effect? 

It applies from September 22, 2025, the first day of Navratri.