The country’s insurance industry, which roughly comprises of more than 50 companies, is also expecting some powerful announcements that will talk more about customer welfare while providing maximum benefits.
The interim budget 2019 is scheduled to be presented on Feb 1, 2019. This will be the current government’s sixth and last budget presentation before the 2019 general elections. Like every year, stakeholders from various sectors are looking forward to announcements and reforms that will have varied impacts on the market. The country’s insurance industry, which roughly comprises of more than 50 companies, is also expecting some powerful announcements from the Finance Minister that will talk more about customer welfare while providing maximum benefits.
Among the many issues that need to be addressed, the insurers believe that there is an immediate need for introducing policies that make insurance benefits available to the masses at affordable premiums. Health insurance industry is the most important sector that needs immediate consideration in this year’s budget as healthcare continues to remain one of the most concerning issues in India today. Though most lawmakers do feel that good health is one of the most important fundamental rights, unfortunately it just remains an axiom of policy making. No doubt, in the last few decades the different governments did introduce new laws and policies that aimed at supporting the governance of the health system, most of these laws have not been implemented systematically.
In the last few years, though the growth rate of premiums has successfully raised to 30%, the consumers are still not fully aware about the benefits of a health insurance. The insurers believe that there is an utter need to spread awareness amongst the masses to promote health insurance which has become a must considering the current healthcare cost in the country. Insurers believe that enhancing the tax rebate under Section 80D from the current value of Rs. 25, 000 to Rs. 1,50, 000 can be a great move by the government. Under this year’s budget, the insurers even expect that the government must waive off the GST charges which are currently 18%.
Some of the insurers are even demanding that just like motor insurance, which is mandatory under Motor Insurance Act, health insurance must also be made mandatory. This is mostly because even after constant liberalization of the health insurance industry, less than one-fifth of India’s population is covered under health insurance. This is enough to prove that it is high time to prioritize health care as a fundamental public good.
Another introduction that is expected in this year’s interim budget is giving the consumers ability to pay level premiums to 5 years with multiple payment modes as available in other insurance industries like Life Insurance. The payment methods can be extended to monthly, quarterly, half-yearly, and limited pay in order to make the premium payment process convenient for the consumers. This will surely make Healthcare in India affordable and accessible which is very important for the overall development of the country.
While adapting technological advancements in the health insurance industry, the insurers are also demanding creation of a regulatory sandbox for product creation to foster advanced ideas. This would include introduction of insurance products linked to wearable devices which will work according to customer demographics and their purchase behaviour.
Another major issue that insurance industry experts believe must be addressed in this budget session is the duration of gestation period. Currently, the insurance industry in India has a long gestation period and it takes a long time for the insurers to achieve a break-even. As per the industry experts, the limit of eight years for carry forward and set-off of business losses is not sufficient.
(By Vaidyanathan Ramani, Head, Product and Innovation, Policybazaar.com)