Follow us on Google News
The government’s decision to exempt retail health insurance from GST is reshaping how Indians approach medical cover. With protection now more cost-efficient, policyholders are upgrading their plans, and data from Policybazaar shows a dramatic shift toward higher sum insured products.
https://the420.in/centre-for-police-technology-launched-as-common-platform-for-police-oems-and-vendors-to-drive-smart-policing/
Bigger Covers Gain Popularity
Following the GST change, the average sum insured in health policies jumped about 38%, from ₹13 lakh to ₹18 lakh. Almost 45% of new buyers opted for covers in the ₹15–25 lakh range, while only 18% chose smaller covers below ₹10 lakh. Older buyers (aged 61–75) and those in Tier-II cities also showed strong uptake — the share of buyers choosing higher covers in smaller towns rose from 44.1% to 48.6%.
Why the Upgrade is Happening
Two big trends underlie this shift: rising hospital and treatment costs, and growing awareness about health risks post-pandemic. Buyers now realise that standard coverage may be inadequate in the face of long hospital stays or critical illnesses. The GST cut acted as a catalyst — making high-value covers financially viable and encouraging people to lock in large protection early.
Add-Ons and Long-Term Plans on the Rise
Beyond higher covers, customers are embracing advanced features: day-one pre-existing disease (PED) coverage is rising, add-on uptake has climbed to around 20%, and multi-year policies are growing in popularity. The shift shows a move from simply buying insurance to building a health-security strategy for long-term protection.
A Smart Financial Move
For middle and high-income earners, the GST exemption and rising medical costs make upgrading health cover a smart financial decision. A higher sum insured acts like a hedge against unpredictable health expenses and removes the pressure of switching plans later in life.
In short, zero GST didn’t just reduce premium costs — it triggered a behavioural shift in the insurance market. As the culture of “adequate cover” gives way to “robust cover”, Indians are rethinking health insurance not as a checkbox, but as a core part of long-term financial planning.
