Goods and Services Tax (GST) apply to almost every sector and services including Life Insurance unless otherwise exempted by the GST Law. As per the latest rates, 18% GST applies to the life insurance premiums. While the rate may seem high enough to disrupt the returns on investment policies, its overall effect is nominal.
The GST in insurance policies applies only on the protection premium or a part of it. Given below are few popular insurance plans and how GST will affect your premiums for them:
1. Term Insurance Plans
Term insurance plans are pure protection plans, thus the GST applies on the entire premium amount. Thus, if your annual premium is Rs. 10,000 for a term policy, you will need to pay Rs. 11,800 including GST.
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