How do I get my 18% GST refund?

It is not a cash refund for past payments. For new policies or renewals in 2025, the tax is simply not charged.

Does zero GST mean my 80D benefit is gone?

No. You still get a deduction for the premium you pay, but since the premium is lower without tax, the deduction amount reflects that.

Can NRIs get GST-free insurance in India?

Yes, NRIs paying via NRE/NRO accounts in foreign currency are often exempt from GST. Check with your insurer for the specific declaration form.

Should I wait for my renewal to get the GST benefit?

Yes, the benefit applies to premiums paid after the reform date. Your next renewal notice should automatically show the 0% GST rate.

Does this apply to ULIPs and investment plans?

The GST removal is focused on protection-oriented plans like term and health. Investment-linked insurance may still carry different tax structures.

Is GST removed for all types of insurance?

The 0% rate primarily applies to individual term life and health insurance. Group or corporate policies still usually attract 18% GST.

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Your 18% Payback: Turning GST Savings into a Larger Insurance Cover

The 2025 GST reform is a game-changer for your wallet. Learn how to use those savings to fix your under-insurance problem without spending an extra Rupee.

4 min read

OneAssure Team

March 19, 2026

Need advice tailored to you?

Looking for the right plan? You don't have to guess. Let us compare the fine print for you and give you an unbiased recommendation.

Need advice tailored to you?

Looking for the right plan? You don't have to guess. Let us compare the fine print for you and give you an unbiased recommendation.

The 18% Bonus You Did Not See Coming

Tax is gone. Finally. For years, every time you tried to protect your family with a term plan or a health cover, the government took an 18% cut. That 18% was GST. It felt like a penalty for being responsible. But the 2025 reform changed everything. For individual plans, that 18% is now 0%. This is not just a small discount. It is a massive opportunity to fix your coverage.Think about it. If you were paying ₹15,000 as a premium for a health policy, you were actually paying ₹2,700 just as tax. Now, that ₹2,700 stays in your bank account. You can buy a better phone or invest it. But there is a smarter way. You can use that same ₹2,700 to buy more protection. You are already used to spending that money. Why not make it work harder for you?

50 Lakhs vs 1 Crore: The Math of More

Many young Indians stop at a 50 Lakh term insurance cover. They think it is enough. It is not. Inflation in India is real. A 50 Lakh cover today might barely cover a home loan and two years of expenses a decade from now. Usually, jumping from a 50 Lakh cover to a 1 Crore cover costs about 20% to 25% more in premium. Guess what? Your GST savings almost bridge that entire gap.Let us look at the numbers. Suppose a 28-year-old pays ₹8,000 for a 50 Lakh term plan. With 18% GST, the total was ₹9,440. Now, the 1 Crore cover might cost ₹10,500. Since there is 0% GST, your out-of-pocket cost for double the cover is now almost the same as what you were paying for half the cover last year. You get 100% more protection for a negligible price hike. This is how you beat under-insurance.

The Waiver of Premium Strategy

Savings are great. Safety is better. If you do not want to increase your sum assured, look at riders. The Waiver of Premium (WOP) rider is often ignored because of the extra cost. It ensures that if you face a permanent disability, your future premiums are waived while the policy stays active. It is a safety net for your safety net.The 18% you save on GST can easily cover the cost of a WOP rider and even a Critical Illness rider. Instead of just taking the cash back, adding these riders makes your financial plan bulletproof. If you are the sole breadwinner, this is a non-negotiable move. You are essentially getting these riders for free compared to your old tax-inclusive budget.

Why Your Office Policy Still Costs More

There is a catch. The 0% GST rate applies to individual policies you buy for yourself or your family. It does not apply to group insurance. If your company provides you with a health cover, they are still paying 18% GST on that premium. This makes your personal policy even more valuable now. Personal plans are now cheaper than ever, while corporate plans remain taxed.For startup founders, this is a bit different. If your startup is GST-registered and you provide mandatory health insurance to employees, you might still claim Input Tax Credit (ITC). However, for a salaried professional, the message is clear. Do not rely only on office insurance. Your personal policy is now more tax-efficient and stays with you even if you quit your job.

The NRI Refund Advantage

Are you an NRI paying premiums for parents in India? You have a hidden advantage. When you pay insurance premiums through your NRE or NRO account using foreign currency, you can often claim a GST refund or exemption. Many insurers have a specific process for this. With the base GST moving to 0%, the paperwork becomes simpler, but the savings for NRIs remain significant. Ensure your insurer marks your status correctly to avoid unnecessary charges.

The 80D Tax Deduction Reality

Will this lower your income tax savings? Under Section 80D, you can claim a deduction for the premium paid. Since you are now paying 18% less (because there is no tax), your total deduction amount on your tax return will be lower. But do not let that worry you. Cash in hand is always better than a tax deduction. Saving ₹3,600 in GST is far more valuable than getting a tax break on that same ₹3,600. You are still winning.The removal of the tax barrier means you can finally afford that comprehensive family floater. Instead of a basic plan with a ₹5,000 room rent cap, you can now afford a 'No Room Rent Cap' policy. In cities like Mumbai or Bangalore, a private room can easily cost ₹10,000 a day. Using your GST savings to upgrade to a plan that covers actual hospital costs is a move your future self will thank you for. You can check your options and compare these upgraded plans on platforms like https://www.oneassure.in to see the real-time price difference.Do not just let the 18% sit in your savings account. Inflation will eat it. Use it to bridge the gap in your protection. Buy that extra cover. Add that rider. Protect your family properly. The tax hurdle is gone. Now, the only thing stopping you is a delay in decision-making.