Health Insurance : Since the implementation of zero GST, demand for health insurance in India has increased by 38%, with more people opting for higher coverage plans ranging from ₹15 lakh to ₹25 lakh. This government initiative has proven to be a significant step towards providing affordable and comprehensive insurance coverage to the public.
Following the implementation of zero GST on health and life insurance premiums by the Central Government in September 2025, the demand for health insurance policies in the country has increased by 38%. According to a recent report by Policybazaar, this new policy has not only made policies more affordable but has also increased public awareness of adopting comprehensive health coverage. Customers are now prioritizing health insurance not only for tax savings but also for family financial security and protection against rising medical expenses.
Increase in Health Cover and Customer Perception
According to the report, the average health cover has increased from ₹13 lakh to ₹18 lakh. Currently, approximately 45% of customers are purchasing policies with coverage between ₹15 and ₹25 lakh, while only 18% purchase policies for less than ₹10 lakh. Significantly, the trend of high-value health insurance has increased even in smaller cities or tier-2 cities. Here the percentage of customers taking premium cover of ₹15-25 lakh has increased from 44.1% to 48.6%.
Senior citizens have also seen a growing demand for health insurance. The trend of purchasing higher-value coverage among those aged 61 and older has increased by 11.54%. This indicates that older customers are increasingly seeking better insurance coverage to cope with rising medical expenses.
The Craze for New Add-ons
Customers are now purchasing add-ons like Day-1 Pre-Existing Disease (PED) and Critical Illness coverage along with basic coverage. These add-ons provide additional protection against early-on illnesses and serious health conditions. Policybazaar’s report also states that customer interest in such policies is growing, and they are seeking to make their health insurance more affordable and useful.
Government’s Role and Future Prospects
The Central Government’s zero GST policy aims to make health and life insurance affordable and accessible to the general public. This has increased the reach of insurance companies and changed the mindset of Indians regarding health insurance. Its popularity is rapidly increasing, especially in tier-2 cities and among senior citizens.
Current trends indicate that the health insurance sector will continue to grow rapidly, becoming a necessary financial security for more people. Public awareness and the ease of purchasing policies through digital platforms have also strengthened this sector.
Zero GST has made health insurance policies affordable, increasing trust and awareness. Currently, 45% of customers are opting for larger coverage that ensures better protection for themselves and their families. With new add-on coverage, health insurance is becoming more effective and reliable, helping to mitigate the growing burden of medical expenses.
