October 30, 2025

The Indian government’s smart move to remove GST on health insurance plans has set the insurance world buzzing! According to a fresh report by Policybazaar, the demand for higher health insurance coverage has jumped by a whopping 38 per cent. Shocking? Not really, because with rising medical costs, people are waking up to the need for strong financial protection. The report says, “Zero GST sparks 38 per cent rise in high-value health plans, demand for add-ons also catches up.” That means buyers are not just buying insurance, but they want big, powerful plans! The average cover amount has surged from Rs 13 lakh to Rs 18 lakh, showing a clear shift to more serious coverage instead of small, basic plans. Nearly half of the buyers (45 per cent) now pick policies with Rs 15-25 lakh coverage after GST was taken off. About 24 per cent choose Rs 10-15 lakh, and only 18 per cent still stick with under Rs 10 lakh. This big change happened after the Central government, in a GST rate rationalization meeting, declared a GST exemption on all health and life insurance premiums starting September 22, 2025. This means customers pay no GST on premiums, making insurance cheaper and more attractive. Who’s driving this move? It’s a mix of millennials and older people alike. Even small cities are joining the bandwagon. The preference for low coverage has dropped from 24.1 per cent to just 16.8 per cent in these places. Meanwhile, Rs 15-25 lakh plans in smaller cities have gone up by 10.2 per cent, from 44.1 per cent to 48.6 per cent. This shows that health awareness is spreading beyond just big metro areas. On top of that, add-ons like Day-1 Pre-Existing Disease (PED) coverage and critical illness protections are becoming super popular. These extras give buyers even stronger financial backup during emergencies. An eye-opener is the rise in high-value policies among elderly folks: customers aged 61 to 75 and those above 75 years have increased their cover by 11.54 per cent. This shift shows seniors are no longer shy about spending on bigger protection to fight rising medical bills. People in smaller towns are also acting smart, grabbing bigger policies early before age or health problems catch up. The overall message? Indians across age groups and cities are realizing the power of solid health insurance, and the zero-GST policy is the magical nudge they needed to up their game. So, the next time you think health insurance is just another expense, remember the new facts - zero GST means better plans and bigger safety nets for everyone!

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Tags: Gst, Health insurance, Policybazaar, Financial security, Healthcare costs, Insurance demand,