According to a PolicyBazaar report released on December 26, 2025, the GST Council’s decision to completely exempt 18% GST on individual health insurance premiums with effect from September 22, 2025, has significantly increased its reach and uptake.
Average sum insured increased by **31%** from ₹14.5 lakh before discount to ₹19 lakh after discount, as customers choose more coverage, putting the savings towards better protection.
There was a significant shift in demand: policies in the ₹10-25 lakh range grew by **47%**, while policies priced at ₹25 lakh and above grew by **85%**. In contrast, policies under ₹10 lakh declined by **24%**, which saw a sharp decline of **29% year-on-year** from 2024 to 2025.
Higher coverage plans (₹10-25 lakh) grew by **55.6% YoY** and plans above ₹25 lakh grew by **49.3%**. Multi-year plans became more popular for long-term stability.
Common claims included heart diseases, cancer, cataracts, seasonal illnesses, day-care procedures, and accidents.
Demographics revealed that younger shoppers were in the lead: The 18-35 age group accounted for **30%** of purchases, followed by 35-45 (**26%**), 46-60 (**23%**), and 61+ (**21%**).
Geographically, smaller cities drove the growth: the share of Tier-3 cities increased from **63.5%** (2024) to **70%** (2025), that of Tier-2 from **13.8%** to **14.3%**, while that of Tier-1 declined from **22.7%** to **15.7%**. Top Cities: Delhi, Bengaluru, Hyderabad, Pune, Mumbai.
This trend reflects improved access amid rising medical costs, which is consistent with the goals of universal coverage.
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