Health, Life Insurance Demand Surges 2x Post GST Exemption: Report

The recent impact of the government's removal of the Goods and Services Tax (GST) on health and life insurance has had a huge impact on consumer behaviour. Recent data from Policybazaar shows a sharp jump in interest, with both life and health insurance hitting highs in average daily demand.

What does the data say?

Term insurance has seen the biggest uptake growth, rising about 2.5 times from earlier levels. Health insurance also followed closely behind at 2.2 times.

What is even more interesting is that the surge did not just fade after the announcement; demand has continued to stay well above normal. This shows a lasting shift in how people are viewing pure protection policies.

The charts show a clear trend, the demand had already started picking up in the weeks leading up to the GST change, soon after initial announcements were made.

By the time zero GST was implemented, searches and inquiries had surged for health and life. Even in the following weeks, term insurance continued to hold at around 1.8 times the earlier baseline, and health insurance at 1.7 times.

This is the strongest movement seen in these segments since the pandemic years, when health fears had prompted many to buy their first policies.

However, the driver of insurance purchase this time is not anxiety among the buyers but 'affordability'.

With GST removed, the cost of essential protection products has come down, making them more accessible to middle-income households that often delay such purchases.

Industry experts note that this GST reform could help address the long-standing problem of India, i.e., low insurance penetration, be it in the health or life segment.

Says Sarbvir Singh, Joint Group CEO, PB Fintech, "The biggest win for us and the industry is that this announcement has successfully converted latent demand into active interest. In India, where financial shocks can wipe out years of savings, this timely move promises to strengthen the resilience of households."

The timing of the announcement has also worked in favour for consumers; it came just before the festive season. This is the time when most Indian families are inclined to make long-term financial commitments.

With Navratri and Diwali considered as occasions for new beginnings, many people take this opportunity to strengthen their safety nets.

The Bottom Line

The GST exemption, overall, has helped achieve what few campaigns could, it turned passive consumer interest into action this festive season. The data shows a broader behavioural shift in Indian consumers, who are not just browsing health and life protection plans, but actually buying them.