New Delhi, Dec. 26 -- The government's decision to exempt Goods and Services Tax (GST) on health insurance from 18 per cent to nil has led to a sharp rise in health cover sizes, with the average sum insured increasing by 31 per cent, according to a report by Policybazaar.

The report said that after the removal of GST, the average health insurance cover increased from Rs 14.5 lakh in the pre-GST period to Rs 19 lakh in the post-GST period. This indicates that people are now choosing higher levels of health coverage, as insurance has become more affordable.

The data indicate that policies with higher sum insureds experienced strong demand after GST was removed. Health covers in the Rs 10-25 lakh range increased by 47 per cent, while polic...