For many Indian travellers, both international and domestic, travel insurance is a vital safety net. The recent changes in the GST (Goods and Services Tax) regime might affect how much you pay for the travel insurance premium. These revisions might lower the tax component and also lead to savings on total premiums.
This blog will give you insights into what has changed, how it might affect the costs and why buying travel insurance is important. When the right cover is in place, you can travel confidently knowing that you’re financially protected.
What has changed under the revised GST rates?
Here are the main revisions for travel insurance and other related policies:
- Till 22nd September 2025, the GST on travel insurance premiums in India was 18%.
- From 22nd September 2025 onwards, family and individual travel insurance policies (this includes accident/medical cover as the main supply) are exempt from GST (0%).
- The add-on or standalone travel covers (for instance, only cancellation or only luggage loss) might still attract GST until they’re bundled with the main policy.
- Employer-sponsored health/accident/travel insurances or group policies might continue with the 18% GST unless they are specifically re-classified.
How the revised GST affects travel insurance premiums
When you’re purchasing a new travel insurance policy (for family or an individual), you may save up to 18% on tax. It’s because the GST is now 0% instead of 18%. For instance, if the base premium is ₹6,000 and the previous GST of 18% would have added ₹1,080, it would lead to a total premium of ₹7,080. However, now that the GST is at 0%, you need to pay only ₹6,000.
For the add-ons that are included in the travel insurance bundle (for instance, trip cancellation, baggage-loss cover or medical evacuation), the whole bundle will become eligible for the 0% GST. This will only happen if it’s treated as a composite supply alongside the main accident/medical cover. However, if you buy a standalone add-on policy separate from the main cover, the GST might still apply at 18%. So, the total cost might remain much higher.
What the GST change means for domestic and international travellers
The revised GST for travel insurance is likely to influence how travellers plan and budget their trips. For domestic travellers, who generally need lower coverage for shorter trips within India, the 0% GST means the quoted premium will now be almost the same as the base premium. This may encourage more Indians to insure domestic travel.
For international travellers, the removal of GST brings noticeable savings, especially for overseas trips where medical costs are higher. Travellers can now either opt for a higher sum insured, save on the total premium or include more add-ons within the same budget. For example, if a family’s base premium was ₹10,000, it earlier rose to ₹11,800 with the 18% GST. Now, with GST at 0%, the same plan costs ₹10,000.
Frequent flyers will also benefit from this change, as multi-trip or annual travel policies become more affordable under the new structure. With a lower tax burden, travellers can redirect their savings towards better coverage, trip upgrades or other travel-related amenities they might have avoided earlier due to cost.
Tips to manage and reduce travel insurance costs after GST revision
Here are some unique ways you can lower and manage the travel insurance costs after the GST revisions:
- You should compare multiple insurance companies and take a look at their base premium before tax or discounts. Since the GST stands at 0%, the headline premium is more transparent.
- Pick a coverage level that you really need. The high-risk nations, senior travellers and long trips demand much higher premiums. When you align the coverage with risk, it will help you control the cost.
- Go for add-ons only if they are needed for your trip (for instance, high baggage value, adventure sports, trip cancellation cover, etc.). Even when the GST is at zero, add-ons can increase the premium.
Why does buying travel insurance still matter despite GST changes?
Below are some of the reasons why you must opt for travel insurance despite the GST changes:
- Medical emergencies overseas or even in remote areas in India might cost a lot more, and having travel insurance can safeguard you from a financially crippling event.
- Trip cancellations, loss of baggage and flight delays are unpredictable and might disrupt the business plans or holiday budgets. Having travel insurance can help cover all these things.
- Even with the GST benefit, the main value is in the cover, ease of serving and the claim settlement quality. Remember, saving tax is good, but the insurance cover is important as well.
- For many destinations, such as those in the Schengen area, travel insurance is needed when you apply for the visa. If you skip it to save money, it will lead to compliance issues, or the visa will be refused.
- When the tax burden is lowered by 0% GST, you may be more inclined to pick the appropriate coverage instead of the minimal cover.
Conclusion
In India, the revised GST on domestic and international travel insurance is a welcome relief, as from 22nd September 2025, the family and individual travel insurance policies can be purchased at 0% GST, which might lower the cost and also make the cover affordable. Nevertheless, the premium you pay depends heavily on the coverage level, trip duration, age and destination. The freed-up tax amount will give you the chance to either upgrade the cover or save money.
FAQs
- Is the GST applicable to individual travel insurance policies now?
For the family/individual travel insurance policies that are purchased after or on 22nd September 2025, the GST is 0%.
- Do the add-ons like lost baggage or trip cancellation attract GST now?
If these add-ons are part of a bundled travel insurance policy with accident or medical cover, the entire bundle might be exempt. Standalone add-ons might still attract GST.
- Does the GST exemption apply to group travel insurance (e.g., corporate team)?
No. Group travel insurance is typically still taxed at 18%.
Disclaimer: The information provided in this blog is for educational and informational purposes only. It may contain outdated data and information regarding the topic featured in the article. It is advised to verify the currency and relevance of the data and information before taking any major steps. ICICI Lombard is not liable for any inaccuracies or consequences resulting from the use of this outdated information.