Pawan Kumar Rai
Co-founder Ditto Insurance & Finshots
GST on health and term insurance is going away.
But that doesn’t mean everyone saves 18%.
For the uninitiated, starting 22 September 2025,
health and term insurance premiums will be
exempt from GST.
It sounds like an instant 18% discount. But in
insurance, as always, the fine print matters.
Here are the most common questions we’re
getting at Ditto (and what we’re telling people) 👇
Pawan Kumar Rai
Co-founder Ditto Insurance & Finshots
1. Will GST exemption apply to both new policies
and renewals?
▶ Yes. Since GST is a transaction-based tax, the
exemption covers all new individual policies and
renewal premiums payable for all existing
individual policies.
Pawan Kumar Rai
Co-founder Ditto Insurance & Finshots
2. I’ve already paid my premium. Will I still get the
exemption?
▶ If it’s a new policy it depends on policy issuance
date (date the insurer actually issues the policy
document), risk commencement date (date your
insurance coverage officially starts) & premium
receipt date (date when the insurer receives your
money)
So, If the policy is issued on or after Sept 22, and the risk
commencement is also on or after Sept 22, the GST
you paid will be refunded.
But, if your risk commencement date is before 22
September, even if the policy document is issued after
22 September, then GST will still apply on that
premium.
Pawan Kumar Rai
Co-founder Ditto Insurance & Finshots
3. Should I buy now (before Sept 22) or should I wait?
▶ Some insurers have made temporary adjustments
and are allowing customers to pay now and have their
coverage start 22nd Sept onwards.
With your consent, they’ll issue the policy after the cut-
off, and coverage will begin then too, making you
eligible for GST exemption.
Remember, if your insurer starts coverage right after
payment, GST will apply, even if issuance happens
later.
Fair warning: If you delay issuance, obviously you will
not have coverage during this period.
Pawan Kumar Rai
Co-founder Ditto Insurance & Finshots
4. What if my renewal is due between now and Sept
22? Will I get exemption?
▶For renewals, almost every insurer starts coverage
the moment you make the payment even if the
updated policy document is issued later.
This means the risk commencement date will fall
before 22 September, and GST will still apply. So likely,
no exemption.
Pawan Kumar Rai
Co-founder Ditto Insurance & Finshots
5. My policy renewal date is after Sept 22, but I’ve
already paid the renewal premium in advance. Will I
still get the exemption?
▶Yes. Since your renewal date falls after 22
September, the GST exemption applies.
Even if you’ve paid early, insurers are expected to
refund the GST once the renewal date passes.
If you don’t receive the refund automatically, you
should follow up with your insurer after Sept 22.
Pawan Kumar Rai
Co-founder Ditto Insurance & Finshots
6. My renewal is due between now and 22 September.
Can I make use of the grace period, delay payment
until after 22 September and get the exemption?
It depends.
▶ Health insurance: If you push your payment into the
grace period and settle it after 22 September, your risk
cover will usually begin from that payment date which
means the GST exemption should apply. We have
spoken to a couple insurers and they haven’t
confirmed this explicitly.
But remember, during grace, you’re not covered. If
something happens, claims won’t be honoured. Big
risk.
▶ Term insurance: Doesn’t work. Risk start is tied to the
original renewal due date.
Even if you pay later, GST applies.
Pawan Kumar Rai
Co-founder Ditto Insurance & Finshots
7. I’m still in the free look period. Should I cancel and
re-buy?
▶You can, but do the math.
Insurers will deduct charges (stamp duty + days you
were covered).
Also, if health has changed, you may not get reissued
as easily. So only do this if the GST savings are clearly
higher than the deductions.
Pawan Kumar Rai
Co-founder Ditto Insurance & Finshots
8. I’ve already paid for 2–3 years (multi-year policy).
Will I get a refund?
▶No. GST exemption applies only to transactions
made on or after 22 Sept.
If you’ve prepaid, nothing changes.
Pawan Kumar Rai
Co-founder Ditto Insurance & Finshots
So what’s the big takeaway?
If you're buying new or renewing soon:
Confirm your issuance and risk start dates
Don’t assume payment = exemption
Don’t risk coverage gaps just to save tax
And always ask your insurer how they’re handling this.
If you're confused, we’re happy to help. Book a free call
with a @joinditto advisor.
We’ll walk you through your scenario. Link under my
profile.
