Post-GST Term Pricing: Why 1 Cr cover is cheaper in Feb 2026 than Feb 2025

The math that feels like a glitch

Imagine buying the exact same product a year later and paying less for it. Usually, inflation makes everything from your morning coffee to your rent more expensive. But if you are looking at a 1 Crore term insurance policy this February, the numbers tell a different story. You are likely seeing a lower premium today than what your older colleagues paid in early 2025. It is not a glitch. It is the result of the biggest tax shake-up in Indian insurance history.

Last year, you were paying an 18% Goods and Services Tax (GST) on your term insurance premiums. On a base premium of ₹12,000, you were shellng out an extra ₹2,160 just as tax. Today, that GST is gone. The zero percent GST rule has effectively wiped out nearly one-fifth of your total outgo. If you sign up for a 30-year policy now, you are saving that 18% every single year for three decades. That is a massive chunk of money staying in your bank account instead of going to the tax department.

The Sabka Bima Sabki Raksha Act effect

Tax is only half the story. The Indian insurance market changed forever with the Sabka Bima Sabki Raksha Act of 2026. This law opened the gates for more global players to enter India. More companies mean more competition. These new players are fighting for your attention by slashing base rates. They want the young, earning Indian population on their books. To do this, they have triggered a price war for 1 Crore covers that we have never seen before.

Earlier, only a few big names dominated the space. Now, with digital-first insurers and global giants coming in, the base price itself has softened. When you combine a lower base price with 0% GST, the final amount you pay in February 2026 is significantly lower than the Feb 2025 quotes. It is a rare window where policy prices have actually moved backward.

Digital checkups and AI underwriting

Remember the days of physical medical tests and long wait times for policy issuance? Those days are fading. Insurers are now using AI-driven underwriting. They look at your digital health footprints and lifestyle data to assess risk instantly. This has removed heavy administrative costs and extra processing fees from your final quote.

Many insurers now offer 'Tele-MER' or video-based medical checkups. This efficiency is passed on to you as a discount. You are no longer paying for the insurer’s heavy paperwork. You are paying for pure protection. This tech-led approach is a core part of the IRDAI vision for 2047, which aims to make insurance affordable for every Indian household.

Individual plans vs Employer insurance

Many of us rely on the group insurance provided by our companies. It feels free. It feels easy. But there is a catch. Group insurance is a temporary perk, not a permanent safety net. If you switch jobs or the company decides to cut costs, you are left without cover at an older age when new policies are expensive.

With the Post-GST Term Pricing advantage, individual term plans have become incredibly affordable. In many cases, the annual premium for a personal 1 Crore cover is now lower than the 'per-head' cost your employer might be paying for a group plan with half the benefits. Owning your policy means you are in control, regardless of your employment status. You get to keep the 0% GST benefit locked in for the entire term.

Adding riders at base cost

A term plan is basic. You might want to add a Critical Illness rider or a Disability rider. Previously, these riders also attracted 18% GST, making the total package feel heavy on the pocket. Now, you can add these layers of protection at their base cost. There is no additional tax burden on these add-ons. You can secure your income against accidents or major illnesses without worrying about the tax bill bloating your premium.

Should you switch your old policy?

If you bought a policy in 2023 or 2024, you might be wondering if you should drop it and buy a new one at 0% GST. This is a tricky area. Here is how you decide:

• Check your age: If you have aged more than 3-4 years since your last policy, your new base premium might be higher despite the GST saving.
• Health status: If you have developed any health issues recently, stick to your old policy. A new insurer might charge you more or reject the application.
• The Math: Calculate the total premium you will pay over the remaining years for the old policy (including GST) versus the new one (at 0% GST). If the gap is more than 15%, a switch might be worth it.

February is the ideal time to make this move. Most insurers increase rates as you cross another year of age. Buying before the financial year ends ensures you lock in the lowest possible base rate. Plus, you still get the full tax benefit under Section 80C. The removal of GST has not changed the fact that your premiums are still deductible from your taxable income up to ₹1.5 lakh. You are essentially saving money twice: once at the time of payment (0% GST) and once while filing your taxes.

The current market is a buyer's paradise. Between the 2026 Act and the zero-tax rule, the cost of protecting your family's future has never been this low. Use a platform like OneAssure to compare how these new rules have changed quotes across different insurers before the March rush begins.