The insurance industry is going from a typical time where the life insurance claims increase because of covid-19. The increase in the claims and the attendant payouts which life, as well as medical insurance firms, suffer 30% surge in premiums as reinsurers see towards recovering the losses. But the insurance premiums in India are still less with respect to the other markets the demand affects by the heavy premiums during the time when the awareness for life and health insurance is much more. The insurance industry seeks towards rationalising the GST and surging the investment threshold to purchase the insurance.
Suggestion for Upcoming Budget 2022-23
- GST reduction on the insurance to 5% from 18%.
- Surge section 80C investment threshold to Rs 2 lakh to permit an individual to purchase the insurance currently Rs 1.5 lakh limit is low and include numerous options
- Make annuity income tax free
- Double medical insurance boundary under Section 80D to Rs 50,000 for higher medical expenses after the pandemic.
- Specify the tax amid pension plans and NPS pension plans from the insurance firms does not subject to applicable towards the additional tax deduction of Rs 50000 available to NPS beneath section 80CCD (1b).
It is being reported that the pandemic has increased the life of the insurance sales because of much more awareness among people towards the essentialities of life insurance particularly for the term and health insurance. The majority of the companies inside the sector have worked on a lower opex for the first time. However, there is a case in which because of the more and more claims particularly in the 2nd year of the pandemic.
Health insurance is an important commodity and requires to be slotted in a 5% GST slab to build it cheaper to access effective healthcare, people would encourage to buy health insurance if there is a GST reduction from 18 to 5 per cent on all personal products. For the senior citizen, the same must be exempted. A rise in the tax deduction limit in section D of the income tax act would assist the penetration of health insurance.
