Retail health insurance was the strongest segment in India’s non-life market in July 2026, growing 31 per cent year on year even as overall industry premiums excluding crop slowed to 12 per cent from 18 per cent in June. Kotak Institutional Equities linked the momentum to sustained demand following the GST exemption on health insurance. The pace is not new: retail health also grew 31 per cent in April 2026, after 28 per cent in 4QFY26 and 33 per cent in 3QFY26.
Nearly a year on from the exemption, the practical question is whether the saving is worth redirecting into a larger cover. Also, how to enlarge it without surrendering benefits already earned.
What the GST Exemption Actually Takes Off a Premium
The 56th GST Council moved all individual health insurance, along with its reinsurance, from 18 per cent with input tax credit to exemption, with the change on services taking effect from 22 September 2025. Premiums were expected to drop 10 to 12 per cent, not the full 18 per cent, because insurers lost their input tax credit when the exemption came in.
One limit matters. The exemption is drawn around individual policies only, so employer-sponsored group cover falls outside it, and anyone relying mainly on corporate insurance has gained nothing. The PIB factsheet positions the measure as a push to widen adoption and cut out-of-pocket medical spending.
Port, super top-up or fresh policy: a quick decision tree
Porting means shifting a policy to a different insurer when it comes up for renewal. Under IRDAI rules, the years already served against pre-existing disease waiting periods come along, so do time-bound exclusions and the no-claim bonus built up over the years. No extra charge applies beyond the new insurer’s premium. The catch is that the new insurer studies the application like a fresh proposal. It can raise the premium, add conditions or say no. If the insurer is not the problem and only the plan needs changing, migration achieves the same thing without leaving the current company.
A super top-up sits above the base policy rather than replacing it, activating only once the primary sum insured is exhausted, and the deductible is crossed. That structure is why a very large cover costs comparatively little.
A fresh policy buys clean terms and nothing else, because every waiting period restarts from day one.
Which one fits
Q1. Has any treatment already been diagnosed or advised?
Yes → Stay put. A new insurer may impose conditions, extra premium, a co-payment or another waiting period, or decline outright, even on a plan marketed as zero waiting period. Complete the existing clock instead.
No → Q2.
Q2. Is the existing policy still in force?
No → Fresh policy. No continuity remains, so every waiting period restarts.
Yes → Q3.
Q3. Is the sum insured adequate for current hospital costs?
Yes, the insurer is the problem → Q4.
No, the cover is too small → Q5.
Q4. Is the company at fault, or just the plan?
The company → Port at renewal, filing 45 days ahead. The insurer must accept or reject within 15 days of receiving the documents; otherwise, the request stands accepted.
The plan → Migrate, with 30 days’ notice and four years of unbroken renewal to avoid fresh underwriting on the existing sum insured.
Q5. Should the base cover grow, or sit under a second layer?
Base cover, and the higher premium is affordable → Raise the sum insured at renewal, accepting fresh waiting periods on the incremental cover.
High cover at low cost, base policy otherwise sound → Super top-up. It activates only once the primary sum insured is exhausted and the deductible is crossed.
Waiting-period traps that survive a switch
Continuity credit attaches to the cover already held, not the upgrade. Chetan Vasudeva of Alliance Insurance Brokers told Moneycontrol that when moving from a ₹5 lakh policy with three years completed to a ₹15 lakh cover, the additional ₹10 lakh may carry new waiting periods. Under the current framework, waiting periods cannot run beyond 36 months, and cancelling a policy to buy a new one restarts the clock.
Three habits reduce the risk.
- File 45 days before renewal, since a request a week out may leave underwriting incomplete when the old policy lapses.
- Keep the existing policy running until the new one is issued and confirmed in writing.
- Read past the premium: Vasudeva warned that a household porting to save ₹2,000 a year can face a large shortfall on a ₹3 lakh hospital bill because of a 1 per cent room rent cap.
None of this is obvious from a policy brochure. Working out how much of a waiting period is already behind you, and what a new insurer would reset, means reading the existing policy schedule line by line. MyRupia reviews policies on that basis without selling any of them, since it holds no insurer tie-ups and earns nothing on a switch.
Disclaimer: This MyRupia article is for informational purposes only and is based on publicly available government, regulatory and industry sources. It should not be treated as investment, financial, tax, insurance, or legal advice. Information, examples, market data, and expert views mentioned in the article may change over time and should not be considered a recommendation to buy, sell, invest in, or surrender any financial product. Readers should evaluate their individual circumstances and consult a qualified financial professional before making decisions.