Quick Summary
The Insurance Brokers Association of India (IBAI) has called on the Ministry of Finance to adopt additional policy measures beyond the recent GST exemptions to deepen health and life insurance coverage across India. While the recent GST exemption on individual health insurance premiums announced during the 56th GST Council meeting has been welcomed by the sector, IBAI said that the move alone may not be sufficient to bring India's large vulnerable population under the insurance safety net. "A
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FAQ :
IBAI is proposing 'soft mandates' which involve embedding insurance coverage into government financial schemes and allowing CSR funds to be used for insurance premiums for vulnerable groups.
The proposal suggests linking insurance to schemes like Mudra Loans and Pradhan Mantri Awas Yojana (PMAY), where a small percentage, around 1%, of the loan amount could be deducted to pay for insurance premiums.
The proposed insurance would offer 360-degree cover including health, life, personal accident, benefit-based business interruption, and property insurance, particularly for low-income borrowers.
IBAI suggests that premium payments for vulnerable groups be recognised as an eligible CSR activity, enabling companies to use their CSR funds to provide insurance coverage.
The government announced a full GST exemption on individual health insurance premiums, effective September 22, 2025, reducing the tax rate from 18%.
IBAI believes that while the GST exemption is helpful, it may not be sufficient to cover India's large uninsured low-income and marginalised populations, necessitating further structural reforms.
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