The ongoing pandemic seems to be far away from getting ended and it is high time that the individuals of our country realized the significance of having an optimum plan handy. The insurance industry has been investing a lot of effort towards increasing the penetration of insurance in our country, and so the Government of our country also needs to step up in this initiative, and focus on both affordability & accessibility. Having said that, the government must consider making some immediate changes to ensure a healthy ecosystem.
To start with, the GST added in the individual insurance plans could be overwhelming to the policyholders as they would have to pay more than before, and it contradicts the mission of increasing the penetration of insurance buyers in India. Hence, the government must work on this area to ensure that the mission is met by either removing or dropping the GST percentage from 18% (which is currently applicable for health insurance). This would also help in securing more people’s lives and offer them the required financial assistance, especially during the ongoing pandemic scenario. The government must also work towards allowing the individuals to help invest this additional amount in significant life phases, like education, home expenses, etc. Also, the Tax exemption must be provided for individuals who are opting for home insurance as it could be an additional burden for people who have already brought their houses through home loans.
Considering the inflation of medical expenses for treatment of covid or any disease, the current deduction limit must thus be increased, and there should be some special provision for senior citizens as well. Furthermore, the additional expense on stamp duty along with the GST amount for term life insurance plans should also be exempted as they are purely risk products. Lastly, government must focus on providing universal health schemes and additional benefits should be added for the retirement plans, along with insurance-related financing solutions or relief schemes for areas highly prone to any sort of catastrophic events. This would ultimately save the government from unplanned relief expenses during such a situation.
