Bought insurance early? Here’s why you can’t claim a GST refund now
Some insurers are now offering the option to start coverage from September 22 for policies purchased in advance, allowing customers to benefit from the 0% GST while locking in terms today.
- Sep 14, 2025,
- Updated Sep 14, 2025 7:32 AM IST
Paid your multi-year insurance premium ahead of time? Don’t expect a GST refund—even though the tax on life and health insurance drops to 0% starting September 22.
The GST cut on individual health and life insurance premiums, effective September 22, 2025, is a major win for new buyers. But if you’ve already paid a lump sum for a multi-year policy, the 18% GST you paid is locked in.
There’s no provision for a refund on GST paid for future years, even if your coverage extends beyond the date when the new rate kicks in. The tax was collected at the time of transaction and deposited with the government, completing the process.
This applies across payment modes—whether premiums are paid in full upfront or in scheduled instalments. However, if your next monthly, quarterly, or semi-annual premium is due on or after September 22, you will no longer be charged GST. Premiums due before that date, even if paid later during the grace period, will still attract the 18% rate.
Some insurers are now offering the option to start coverage from September 22 for policies purchased in advance, allowing customers to benefit from the 0% GST while locking in terms today.
If you’re still within the free-look period—typically 15 to 30 days from purchase—you can cancel your policy and get a full refund of the premium and GST, minus any processing fees or deductions for coverage days. Many buyers are using this route to cancel recent purchases and reissue policies post–September 22 to benefit from the tax cut.
But outside of the free-look window, cancelling won’t unlock a GST refund, even if coverage hasn't started. The refund applies only if the policy is unwound completely and within the permitted timeline.
Paid your multi-year insurance premium ahead of time? Don’t expect a GST refund—even though the tax on life and health insurance drops to 0% starting September 22.
The GST cut on individual health and life insurance premiums, effective September 22, 2025, is a major win for new buyers. But if you’ve already paid a lump sum for a multi-year policy, the 18% GST you paid is locked in.
There’s no provision for a refund on GST paid for future years, even if your coverage extends beyond the date when the new rate kicks in. The tax was collected at the time of transaction and deposited with the government, completing the process.
This applies across payment modes—whether premiums are paid in full upfront or in scheduled instalments. However, if your next monthly, quarterly, or semi-annual premium is due on or after September 22, you will no longer be charged GST. Premiums due before that date, even if paid later during the grace period, will still attract the 18% rate.
Some insurers are now offering the option to start coverage from September 22 for policies purchased in advance, allowing customers to benefit from the 0% GST while locking in terms today.
If you’re still within the free-look period—typically 15 to 30 days from purchase—you can cancel your policy and get a full refund of the premium and GST, minus any processing fees or deductions for coverage days. Many buyers are using this route to cancel recent purchases and reissue policies post–September 22 to benefit from the tax cut.
But outside of the free-look window, cancelling won’t unlock a GST refund, even if coverage hasn't started. The refund applies only if the policy is unwound completely and within the permitted timeline.