Different GST rates are applicable to different life insurance plans
GST of 18% is charged on term policies, which are the cheapest form of insurance as they only carry the mortality cost
In the case of traditional policies, which bundle insurance and investment, GST is levied at 4.5% on the first-year premium and 2.25% on premiums for subsequent years
When buying an insurance policy, it’s important to look at the various costs. Apart from the costs specific to insurance such as mortality cost, you also need to pay goods and services tax (GST). However, you may not find this information displayed prominently in advertisements.