Easier Payments, Lower Premiums: NRIs Gain From GST-Free Term Plans

The removal of goods and services tax (GST) on term life insurance premiums is a significant and welcome reform. For the non-resident Indians (NRIs), who were earlier paying an additional 18 per cent GST on their term premiums, this translates into an immediate reduction in overall cost. “Term insurance, by nature, is a pure protection product and not an investment-linked policy, so removing GST makes it more affordable and equitable,” says Narendra Bharindwal, president, Insurance Brokers Association of India (IBAI).

NRIs Get Freedom To Pay Premiums From Any Account

Previously, the GST exemption process for NRIs was tedious, as they had to pay the premiums only through their NRE accounts and submit their international address proof every year to maintain eligibility. The new rule, however, eliminates both these requirements, making the process far more convenient for them.

“NRIs can now use any Indian or overseas bank account to pay premiums without worrying about proof or additional paperwork. This makes the overall process simple and saves time. It also removes the operational hurdles that earlier discouraged many living abroad from continuing or renewing their policies,” says Sarita Joshi, head of health and life insurance, Probus.

Agrees Varun Agarwal, head of term insurance, Policybazaar, “Earlier, NRIs had to pay premiums strictly from their NRE accounts and submit international address proof every year to claim the GST waiver. With GST now at zero per cent, those extra steps are gone. Customers can pay from any account, without worrying about documentation or losing benefits.”

Policy Change Spurs NRI Interest In Long-Term Insurance

“This change is expected to significantly encourage NRIs and boost their interest in buying long-term protection plans in India. Insurers are already recalibrating their outreach and product messaging to highlight the post-GST advantage. Many are strengthening their digital onboarding, underwriting, and cross-border service infrastructure to serve the growing NRI segment better,” says Bharindwal. 

This policy reform, therefore, is not only a financial relief but also a catalyst for expanding India’s protection coverage footprint globally, aligning with the broader ‘Insurance for All by 2047” vision.

“We’re already noticing stronger interest from the NRI community. Many overseas Indians want to keep their financial ties with India and ensure their loved ones are protected here. Now that the process is simpler and the cost lower, there’s a renewed confidence in buying long-term protection plans,” says Agarwal.