• New GST rate
• No Gust on LIC
• Good news for life insurance

Life insurance is a good news for those. The GST Council has decided in their 8th meeting that no GST will be required on life insurance premium. This rule will be applicable from the first day of Navratri from September 7, ie Navratri. In the past, life insurance premium was being charged 5% GST, but now it has been completely canceled.

This will be a major advantage for LIC policy and the premium can be cheaper. There will be no GST on the LIC policy at a new GST new rate. Let’s explain it with mathematics.

Will save so much money on LIC Insurance Policy

Suppose you took the LIC term insurance policy and its annual premium is Rs. Earlier, it was charged 5% GST, that is, Rs. In total, you had to pay Rs. Now, after the GST 1, you only have to pay Rs. That is, it will save Rs 5 per year. If you are paying a premium of Rs 1 lakh, you will save Rs. This amount is very important to you, especially when you have been taking insurance for a long time.

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Will reduce additional costs

Other policies of LIC, such as an endomement plan, were charged 8.5% GST in the first year and 1.5% GST in the subsequent years. For example, if your endment plan premium is Rs. 5, you have to pay Rs. 90 in the first year and Rs. Now deleting the GST will also end these additional costs. That is, the load on your pocket will be reduced and insurance will be more affordable before.

Results on insurance companies

However, this discount will also affect insurance companies. According to the HSBC report, deleting GST could increase the demand for insurance due to cheap premium. But companies will not get the benefit of input tax credit (ITC), which can result in their costs 3-6%. Nevertheless, a large company like LIC can easily handle this change and give customers a full benefit of cheap premium.

This decision will be a boon for the general public. Cheap insurance will attract more people, which will increase financial security. Especially for the middle class, which had previously been involved in insurance due to expensive premiums, it will now be easier. This allows more and more people to get insurance and move to a safe future. This is a golden opportunity for LIC customers, as good coverage will now be available at prices.

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