Following the Centre's landmark decision to waive the 18% GST on individual life and health insurance, the sector is witnessing a strong surge in consumer interest and policy enquiries. The tax exemption, part of the broader GST 2.0 reforms that took effect on September 22, 2025, appears to have made insurance more affordable - triggering both new enquiries and sales.
According to data shared by Policybazaar, one of India's largest online insurance marketplaces, there has been a 61% rise in insurance enquiries and a 56% increase in average daily leads during the first week of the new GST regime (September 22-28, 2025) compared to the same period last year.
"There has been an enthusiastic response from individuals under the new GST regime. The waiver has made insurance more accessible and financially appealing," said the Chief Business Officer - General Insurance, Policybazaar.
Even before the official rollout, anticipation over the tax waiver had begun to drive digital activity. Between September 1 and 22, Google impressions for insurance searches increased by over 40% month-on-month, reflecting heightened consumer curiosity.
Policybazaar currently features around 51 general and life insurance providers, and the platform confirmed that all insurers have passed on the full GST benefit to customers, ensuring lower premiums for policyholders.
While it may be too early to fully assess the rise in policy purchases, several insurers have already reported an uptick in sales. "We expect the full impact of the GST waiver to be visible by October-end. The third and fourth quarters traditionally see higher insurance purchases for tax planning purposes, so the timing of this reform is ideal," said the Chief Distribution Officer of a leading public sector general insurer.
Industry associations have also hailed the move. The President of the Insurance Brokers Association of India (IBAI) described the early response as "very encouraging."
"The relief from GST has immediately improved affordability. We are confident that this reform will create not just a short-term spike but sustained demand over the long term," he added.
As per Life Insurance Council data, India's life insurance industry collected Rs 3.97 lakh crore in new business premiums in FY25, growing by 5.13% year-on-year, while health insurance premiums rose 8.98% to Rs 1.18 lakh crore, making it the largest segment in the non-life category.
With the removal of GST, industry experts anticipate that both these segments will witness accelerated growth in the coming quarters, as affordability improves and awareness about financial protection deepens.
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