What Does Life Insurance Advisor in Delhi Have to Say About New GST Rules

1. What Does Life Insurance Advisor in Delhi Have to Say About New GST Rules? Good news: Recent changes in GST rules have made life insurance more affordable for everyone. If you’re planning to buy a new policy or review your existing one, this is the perfect time to do it. A life insurance agent in Delhi can help you understand these changes and guide you toward the right policy that fits your goals and budget. Understanding GST on Life Insurance When the Goods and Services Tax (GST) was introduced in 2017, it aimed to simplify the entire taxation system. Instead of paying multiple taxes like service tax or VAT, everything came under one umbrella, GST. Life insurance, being a financial service, also came under this rule. Different types of policies were taxed at different rates. For example, term plans were taxed at 18%, while endowment and ULIP plans had lower rates. However, the recent reform in September 2025 has completely changed this scenario. The government has announced that individual and retail life insurance premiums are now GST exempt. This means you now pay only your base premium, with zero extra tax. What’s New in the GST Reform 2025? The latest GST update is a game-changer for the insurance sector. Here’s what has changed:  No GST on life insurance premiums for individual and retail policies.  Group insurance policies will continue to attract the old GST rates.  The change took effect September 22, 2025. This move aims to make life insurance affordable and encourage more people to secure their families’ futures.

2. Old vs. New GST Rates on Life Insurance To understand the real benefit, let’s look at how the rates have changed across various policy types: Policy Type Old GST Rate New GST Rate (From Sep 2025) Term Insurance 18% 0% Endowment Policy 4.5% (Year 1), 2.25% (Later Years) 0% ULIPs 18% 0% Single Premium Annuity 1.8% 0% This means that whether you are buying a pure protection plan or an investment-linked policy, you will now pay only the base premium - no tax added. How This Impacts Your Premium Let’s understand this with a simple example: Before GST Reform If your term insurance premium was ₹25,000 annually, you paid an additional ₹4,500 (18% GST). So, the total cost became ₹29,500. After GST Reform Now, the same policy costs you only ₹25,000 - no added tax. That’s a direct saving of ₹4,500 every year. Over a 20-year policy, that’s ₹90,000 saved just in taxes! When you’re investing for the long term, even these small yearly savings can make a big difference. A life insurance advisor in Delhi can help you compare various policy options and show how these new rates can fit better into your financial plan. Why the GST Removal Matters 1. Encourages Financial Protection With premiums becoming more affordable, more families can now consider getting covered. This helps ensure better financial protection and peace of mind. 2. Boosts Long-Term Savings Life insurance is not just about protection; it’s also a disciplined way to save for the future. The GST removal allows you to allocate more funds directly toward your savings goals.

3. 3. Better Accessibility For young earners and first-time buyers, even a small reduction in premium can make life insurance accessible. The change removes a major barrier for those who previously found premiums expensive. 4. Supports Overall Financial Planning If you’re planning your financial goals, like children’s education, home purchase, or retirement - these lower costs can free up money for other investments or savings. GST on Health and Reinsurance Policies Reform did not stop at life insurance. The government has also waived GST on:  Individual health insurance policies (including family floaters and senior citizen plans).  Reinsurance services - making the overall insurance ecosystem more cost-effective. This makes it easier for people to invest in both health and life coverage without worrying about extra costs. Why You Should Review Your Policy Now This is the perfect time to review your existing coverage or explore new policies. With GST gone, you can:  Increase your cover without increasing your total premium outflow.  Add riders like accidental death or critical illness at a lower cost.  Explore investment-linked insurance plans with better returns. Conclusion: Removing GST on life insurance premiums marks a positive change for every policyholder. It not only reduces costs but also encourages more people to secure their loved ones’ futures. Life insurance is one of the smartest financial tools you can invest in. It protects your family, builds long- term savings, and now, thanks to the GST exemption, fits better into your budget too. If you’ve been delaying buying life insurance, this is the perfect time to act. Address Midas Finserve 804, 8th floor, Indraprakash Building 21, Barakhamba Road, New Delhi – 110001 Mobile Number: 9810070252 Website: https://www.midasfinserve.com/