Connect
To Top

All About Paying GST on Premium of Health Insurance Policy

Shoulder pain exercises prevent injury

A good investment plan is the need of the hour. A well-planned investment plan for healthcare facilities provides you financial security. You need a good healthcare insurance policy to ensure good health in uncertain times. This is even more evident in times like now with the Coronavirus pandemic upon us. There is an increase in financial expenses during medical emergencies. If you have a stable health care policy that secures your future, you are at peace of mind. The insurance companies have customized health insurance policies according to the needs of the buyer. You should keep in mind the health care needs of your family and use user-friendly portals to buy the health insurance policy.

Some very basic things you need to know in this area are:

  • You need to pay the premium along with GST on your health care policy regularly.You can check gst on insurance premiums with the service provider. A Goods and Services Tax is a single tax paid indirectly when you consume various goods and avail various services. There are five slabs of Goods and Services Tax 0% 5% 12% 18% and 28%. Nowadays you have to pay additional 18% Goods and Services Tax on your premium.

There are 3 types of Goods and Services Tax

  • The tax that is paid to the central government as per the transaction is the central Goods and Service Tax.
  • An indirect tax paid to the state government is the state Goods and Service Tax.
  • A tax paid on supplies between two states, a state, and a union territory is the Integrated. 

Goods and Service Tax

Impact of GOODS AND SERVICES TAX ON PREMIUM:

  • There is a remarkable impact on the health care insurance policy premium both on the buyers and the insurance companies as the Goods and Service Tax on the premium has increased from 15 % to 18%. The additional Goods and Service Tax on the current rate of health care insurance policy has affected the number of buyers. But still, before buying the policy you should keep in mind the comprehensive coverage of the insurance policy that is not restricted to hospitalization before and after charges, daycare treatment charges, diagnostic charges, OPD cost, and Maternity cost.
  • There is an increase in the Goods and Service Tax rate of health insurance policy premium rates. But this additional increase in Goods and Services Taxrates on the premium is not applicable to life insurance policies
  • Suppose the coverage of a health insurance policy is 5 lac. And the premium you have to pay is 11000 per year. Before Goods and Service Tax was introduced the additional tax charges were 15%. So, you had to pay 12. 650 rupees on 11000 paid for the premium.
  • But nowadays the tax has increased to 18% and now you have to pay 129 80 rupees on 11000 paid as premium on the healthcare policy. You have to pay a higher premium amount when you renew the health insurance policy. This is due to the hike in the additional tax. If you have purchased a policy earlier with a longer-term period then the premium would not be affected by the Goods and Service Tax.
  • There is a positive impact of the rise in the Goods and Service Tax both on the buyers and the insurance company. If there is a hike in the prices of the premium consequently the competition in the market increases. The insurance companies have to sell the health care policies at an affordable rate. 
  • When the healthcare cost increases slowly and steadily there is a financial burden on health insurance companies. So there is an availability of policies with affordable premiums. This increases the convenience of buyers as the process of buying the healthcare policy becomes hassle-free
  • The corporate policyholders having group policies only for their serving employees are not able to avail the input tax credit.
  • Several companies in the market have several policies available for the buyers but a Care Health Insurance companyis one of the best companies in India. They have many -health insurance plans for their customers.
  • Goods and services tax is refundable when a person is selling goods at lower tax rates when he or she is paying a higher tax rate. Goods and Services Taxis not refundable on health insurance plans. There is a tax deduction on the group insurance policy where you can get rupees 25000 for individuals and rupees 50000 for senior citizens.

Therefore increase in the additional tax to be paid on premium has affected both the buyers and the sellers of the insurance policy. The buyers should still keep in mind the health care needs of the family and the budget. You should buy the policy according to your budget so that you can pay the premium easily. You should also be careful while filling the proposal formsgiving all the personal details. The premium should be paid regularly. You should also so keep in mind the sub-limits of the policy. Carefully go through all the details of the insurance policy and consult your friends and relatives before buying the policy.

More in FITNESS

The Rx Review is an independent fitness website, reporting on the Sport of Fitness, functional fitness news, The CrossFit Games, health and diet related information, and also provides reviews on sports performance products.