Particularly in the rise of medical cases during and post-pandemic, the insurance sector was in demand. Experts see that the 18% GST is higher on health and term insurance and the same must be reduced.
Much more people shall take health and term insurance for their medical security if the government cancels the 18% GST on the same. Because of the high premiums, there is a lesser percentage of people who have the insurance of health in the country.
People used to pay for medical services from their own pocket and prevents to pay insurance premiums that are higher.
In the former year the Confederation of General Insurance Agents Associations of India, an umbrella body of non-life insurance agents, emphasized the government to at least a differentiation between policies on commercial lines (taken via industry, and commerce) including the policies made on the personal grounds which are been claimed via people.
The premium filed for policies for industry and commerce gets the ITC. However, a person is needed to pay the premium along with the high rate of GST at 18 per cent for the health, personal accident, and household security (fire, theft, etc) policies.
On the term policies, an 18% GST has been levied. Hence when your yearly premium for the term plan would stand at Rs 5000 then you are furnishing with Rs 900 for Goods and Services Tax.
When you have chosen an add-on like accidental death advantage (for additional payout for the concern of death because of an accident) then you are obligated to file an 18 per cent GST (Goods and Services Tax) upon the additional premium levied to the rider.
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“This discourages people from availing policies for protection. Non-Life insurance for households to cover the risks of hospitalisation and accidents needs to be pushed and encouraged by the government to gradually ensure social security for citizens by prompting individuals to think of risk transfer to Insurance Companies at bearable, economic costs,” the confederation expressed.
he fitment committee, a panel of central and state government officials functioning for the GST Council has denied the offer for the lower tax rate on premiums paid on insurance policies from life to health to third parties.
Insurers seek health insurance premiums in the former 2 years because of the pandemic since many people approach insurance schemes to secure themselves for financial security.
