Is There Still GST on Your Notice?

The 56th GST Council meeting on 3 September 2025 exempted individual health insurance from GST with effect from 22 September 2025. Ditto, an insurance advisory, notes that the exemption depends on the date you pay the premium, not the date the policy started. A renewal paid on or after 22 September 2025 should show no GST.

The exemption covers individual policies, family floaters, senior citizen plans, individually sold critical illness cover and retail top-up and super top-up plans. Group health insurance from an employer or bank still carries 18%. If your renewal notice for an individual or family policy shows a GST line, ask the insurer why before paying.

On the same base, the saving is always about 15.3%, because removing 18% tax from a total that included it takes out 18 parts in 118. For the senior couple above, that is ₹15,672 a year. For a 25-year-old on the same plan, Ditto’s figures show ₹15,843 falling to ₹13,426, a saving of ₹2,417.

How Much Did the Base Premium Actually Rise?

Here is the catch. When insurance became exempt, insurers lost the ability to claim input tax credit on their own business costs. Ditto notes this could push some insurers to raise base premiums slightly, and that a few major insurers began revising premiums in 2026. Medical inflation adds to the pressure: Business Standard reported it at 12% in FY24 and projected around 13% for FY25, and Niva Bupa told the paper it planned increases of about 8% to 9% across its portfolio in FY26.

So the right comparison is base premium to base premium, not total to total. Most renewal notices or policy schedules show the base and tax separately. Divide last year’s total by 1.18 to find last year’s base if it does not.

What a fair hike looks like

Under IRDAI rules, as summarised by PayBima, insurers cannot increase an individual’s premium solely because they made a claim or developed a new illness. Permitted increases are portfolio-wide revisions approved for everyone in a product and age band, scheduled age-band changes set out in the policy, and increases you choose, such as a higher sum insured. If your hike is much larger than others on the same plan and age, ask the insurer to explain it in writing.

Are You 60 or Older? The 10% Line

Senior citizens have faced the steepest increases. In early 2025, IRDAI directed that health premium revisions for senior citizens should not exceed 10% a year without prior consultation with the regulator, Moneylife and PayBima reported. This does not freeze premiums, but a jump above 10% should have regulatory backing.

Age bands deserve their own check. Most policies price in bands such as 46 to 50 or 56 to 60, and moving into a new band can lift the premium sharply in one year. That is allowed if the band and rate are in the policy’s premium table. Ask for that table if you do not have it.

Did Your Bonus and Add-Ons Carry Over?

Many policies add a cumulative bonus, extra cover for each claim-free year, sometimes up to double the base sum insured. The bonus is a benefit you have earned, and it should appear in your renewal schedule. If it is missing or reduced without a claim, query it before paying.

Add-ons are the opposite problem. Insurers often renew riders automatically, such as room rent waivers, OPD cover or consumables. Some are valuable; others duplicate cover you already have or were added during a sales call you have forgotten. Each add-on carries its own premium. Removing one you do not need is the simplest way to cut a renewal bill without reducing core cover.

The first two figures matter at renewal because they reward continuity. After five continuous years, PayBima notes, claims generally cannot be rejected for non-disclosure of a pre-existing disease, except for fraud or permanent exclusions. A break in cover can reset that clock, which is a strong reason not to let a policy lapse over a disputed hike.

Read the Policy Schedule, Not Just the Payment Page

Most people never open the renewal schedule, the PDF that lists who is covered, for how much and with which conditions. The payment page shows only the amount. The schedule is where errors and silent changes hide, and it takes five minutes to read.

Names, ages and members

Check that every family member is listed with the correct date of birth. On a family floater, the premium is usually driven by the eldest member’s age, so a wrong birth year can push the whole policy into a costlier band. If a child has turned 25 or moved onto an employer’s policy, ask whether removing them lowers the premium, and what continuity options they have if they need their own cover later.

Room rent, co-payment and sub-limits

These three lines decide how much of a hospital bill you actually pay. A room rent cap of 1% of the sum insured, for example, can reduce the payout on the whole bill if you choose a costlier room, because many charges are scaled to the room category. A co-payment clause means you pay a fixed share of every claim. If these have appeared or tightened at renewal, compare the policy with alternatives before paying.

Nominee and contact details

Outdated phone numbers and email addresses slow down cashless approvals and claim updates. An outdated nominee can complicate a payout. Updating them at renewal costs nothing and removes friction when you can least afford it.

How Much Time Do You Really Have?

You do not have to pay on the day the email arrives. IRDAI’s master circular of 29 May 2024, as reported by Moneylife, sets a grace period of 30 days for annual, half-yearly and quarterly premiums and 15 days for monthly premiums. Insurers must cover claims made during the grace period, provided the premium is paid within it.

Using a few days of grace to query a hike is reasonable. Using all of it is risky: payment failures, bank holidays and system delays happen. Aim to settle any question and pay at least a week before the grace period ends.

Would Porting Get You a Better Deal?

If your insurer’s hike seems out of line, portability lets you move to another insurer at renewal while keeping credit for waiting periods already served. Ditto recommends applying 45 to 60 days before renewal. The current insurer must share your policy and claim history through the Insurance Information Bureau portal within 7 working days, and the new insurer has 15 days to decide once documents are complete.

If the Insurer Will Not Explain the Hike

Start with the insurer’s own grievance process. Write to the grievance officer named on the policy or website, quote your policy number and ask for the reason for the revision, whether it applies to all policyholders of your age and plan, and, for members over 60, whether the regulator was consulted. Keep the reply.

If the answer is unsatisfactory, IRDAI’s Bima Bharosa portal records complaints against insurers, and the Insurance Ombudsman handles disputes without court fees. Pay the renewal while the complaint is pending so that your cover and waiting-period credits are not lost. A dispute about price is far easier to win than a claim rejected during a lapse.

Is the Cover Still Big Enough?

Renewal is also the cheapest moment to ask whether your sum insured still fits. Hospital costs rise faster than general prices. If medical inflation runs at 12%, as Business Standard reported for FY24, the same treatment costs nearly twice as much after six years. A ₹5 lakh policy bought a decade ago may now cover far less than it did.

If the cover is too small, a super top-up plan is often a cheaper way to add protection than raising the base sum insured, because it pays only above a set deductible. Retail top-up and super top-up plans are also covered by the GST exemption, Ditto notes. Raising the base cover at renewal can trigger underwriting on the increased amount only.

Renewing Other Policies? The Same Habit Pays

The same discipline applies beyond health cover. Individual life insurance premiums, including term plans, were also exempted from GST from 22 September 2025, as Business Standard reported, so a renewal premium on a personal term plan should show no GST. For motor insurance, check that your no claim bonus has been applied: it reduces the own-damage premium for each claim-free year under the standard slabs used by insurers.

The Two-Minute Renewal Checklist