“The Government’s endeavour to educate the common man on the importance of having life security related products like Life Insurance, Health Insurance has continued in this year’s budget also.
The implications of providing health insurance of up to Rs. 1 lakh per family and a top up of Rs. 35,000 for people above 60 years is that people will be more aware of the need for insurance and Life Insurance companies can capitalize on the same.
The measures such as withdrawal of up to 40% of the corpus at the time of retirement to be tax exempt in the case of National Pension Scheme (NPS) and Annuity Fund which goes to legal heir will not be taxable, are great incentives for people to inculcate the habit of savings through pension schemes. This will provide a greater thrust for Life Insurance companies to bring out more pension products that will suit the needs of people. Also the reduction of Service Tax on single premium annuity policies from 3.5% to 1.4% will help reduce the cost of the policy, the benefits of which will be passed on to the consumers.
The Government has outlined its focus on Growth, with major importance given to rural economic development by providing better livelihood for the farmers and households below the poverty line. This in turn will improve the likelihood of more people getting out of poverty which will give the Life Insurance sector an opportunity to focus on rural India as better livelihood will give rise to the need for life insurance.”
