GST 2.0: Making Term Insurance Affordable for All
The removal of 18% GST under GST 2.0 makes term insurance more affordable in India. This significant tax change reduces costs, making it accessible for more individuals, encouraging financial protection, and allowing better long-term financial planning. GST 2.0 has transformed term insurance into a cost-effective financial tool.
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In a landmark move, GST 2.0, effective from September 22, 2025, eliminates the 18% GST on term insurance in India, drastically lowering costs and making these plans accessible to a broader audience. This policy change stands to benefit individuals across various income levels who seek basic life insurance protection.
Term insurance, a fundamental form of life insurance, offers a lump-sum payment to families if a policyholder dies during the policy term. The recent tax reform allows policyholders to pay only the premium set by the insurer, without additional GST, significantly reducing prices for buyers.
This change is crucial for Indian families who previously faced higher costs deterring them from opting for term insurance. With more affordable premiums, the reform is expected to promote greater financial protection, enabling families to secure their future and incorporate insurance into more comprehensive long-term financial planning strategies.
(With inputs from agencies.)
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