Goods and Services Tax or GST indirect tax system introduced by the president and government of India in the year 2017. It includes all the goods and services that a consumer uses or depends upon, such as electronics, petroleum products, health insurance, etc. GST combined all the other taxation systems such as central excise, state tax, service tax, etc. into a single tax.

Types of GST:

  • CGST: It is the percentage of a transaction by a consumer that goes to the central government. It is charged on interstate transportation of various goods.
  • SGST: It is charged by the state government of a particular state and is charged for the intrastate transportation of goods.
  • IGST: IGST or Integrated GST is charged on import and export of goods to and from India.

GST Impact on health insurance premium:

GST on health insurance premium has brought in various changes in the insurance industry. Due to the implementation of GST, the previous tax of 15% rose by 3% to 18%. It affected the insurance policyholder both positively and negatively. Due to the GST, the insurance companies also have to rethink their strategies for selling health insurance plans.

Positive Effects of GST on Insurance Premium:

Even though the tax percentage on the premium amount increased, an individual must think that is not a good thing. But, that’s not the case. As the premium amount of health policy increased due to GST, and with the increase in competition, the insurance companies fear that they might lose a lot of customers. This led them to introduce a variety of affordable policy plans. Thus, ultimately bringing the policy premiums the same or even lower in some cases than before.

Care Health Insurance provides a variety of affordable health insurance premiums with a large hospital network chain, cashless claims, and 24×7 claim support.

Negative Effects of GST on Insurance Premium:

Due to GST, the input tax credit for the insurance policyholders will not be available. The corporate policyholders who provided insurance to their employees and their families will also not be able to input their tax credit. Although the GST led to the introduction of more affordable policy plans, due to the 3% tax increment, all the new and pre-existing policyholders will have to pay a higher premium amount.


Implementation of GST on Insurance policies increased the premium amount. But an individual must remember that medical expenses are increasing day by day. Also, if a person has a medical history of critical illness in his family, should be more cautious. Treatment of a critical illness costs a huge load of money which can bring a person with low income or unstable financial conditions under huge debt. By getting a health insurance policy, an individual is protecting his and his family member against diseases or any mishappenings in the future. If you Compare Health Insurance, just be sure to keep your requirements in mind including the reputation of the insurer, claim settlement ratio, etc.