PTI New Delhi

Terming the GST Council's decision to exempt insurance premiums from the indirect tax as a landmark move, insurers said this will help make products more affordable and expand insurance penetration.

Announcing the outcome of the 56th GST Council meeting, Finance Minister Nirmala Sitharaman on Wednesday said all individual life insurance policies, whether term life, ULIP or endowment policies and subsequent reinsurance, are exempt from GST.

All individual health insurance policies, including family floater policies and policies for senior citizens and reinsurance thereof, will also be exempt from GST, she said. Since its inception in July 2017, GST at the rate of 18 per cent has been levied on premiums paid towards health insurance and life insurance.

Commenting on the GST Council decision, LIC CEO & MD R Doraiswamy termed the rate rationalisation as "visionary initiative". Removal of GST on individual life insurance products, a step towards making life insurance more affordable to all citizens of the country to meet the objective of insurance for all by 2047, Doraiswamy said.

Sharing his thought Ashok P Hinduja, Chairman, Hinduja Group of Companies (India) said steps like removing GST on life and health insurances will prove to be revolutionary in this regard. At a time when medical inflation is rising steeply, this step directly benefits citizens and eases the financial burden on families, Bajaj Allianz General Insurance MD & CEO Tapan Singhel said.