Policyholders in India delay insurance renewals ahead of GST exemption on premiums from Sept 22, 2025. Here’s what it means for you.
Starting September 22, 2025, insurance premiums in India will become exempt from GST (Goods and Services Tax). This change has made many policyholders pause before renewing their insurance. They hope to renew after GST is removed, so they can pay less. (Business Standard)
What’s Going On
- Insurance companies usually send renewal notices about 2-3 months before a policy ends. These notices still show premiums with GST included because the current rules have not changed yet. (Business Standard)
- People whose insurance policies expire before September 22 are especially likely to wait. They want to renew after the date, when the GST exemption starts. (Business Standard)
- Meanwhile, new policies (fresh issuances) are continuing at nearly normal rates. Some insurers are already offering new policies priced with the nil GST rate in anticipation of the reform. (Business Standard)
Why Policyholders Are Hesitant
- Cost savings: Eliminating GST from insurance premiums means a lower total cost for policyholders. Waiting until the exemption kicks in could mean paying less.
- Timing issues: If renewal happens just before the exemption, you still pay GST. Some people are trying to time the renewal to avoid this.
- Clarity and trust: People want assurance that the new rules will be applied correctly and that there are no hidden catches.
What It Means for Insurers
- They may see a dip in renewal volumes temporarily, since many policyholders delay.
- Insurers have to manage their cash flow, projections, and customer service, balancing those delays.
- They also need to prepare for when the GST exemption takes effect—adjusting billing systems, renewal notices, and customer communications.
Key Dates
| Event | Date |
|---|---|
| GST exemption on insurance premiums becomes effective | September 22, 2025 |
What You Should Do if You Have a Policy
- Check your renewal date: If your policy expires after September 22, it might make sense to wait. If before, renewing now vs later needs some calculation.
- Contact your insurer to confirm whether the premium amount you’re quoted (for renewal) will change after the GST exemption.
- Read the fine print: Make sure renewing later won’t cause gaps in coverage or affect other benefits.
Conclusion
With the GST exemption on insurance premiums coming into effect on September 22, many people are postponing renewals to take advantage of lower costs. For fresh policies, things are more stable. If you have a policy, consider your renewal date and cost comparison carefully. The days ahead may bring financial benefits once the new rules kick in.