Budget 2020: Remove GST, increase tax benefit on health insurance premium of senior citizens to Rs 1 lakh – Expectations

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Updated: January 6, 2020 4:31:08 PM

Budget 2020 expectations: Limit for senior citizens should be increased to Rs 1 lakh, considering premium rates are higher for this age category.

 health insurance product, GST, tax benefit, health insurance premium, senior citizens, hospitalisation, Budget 2020, Budget 2020-21, Budget 2020, Budget 2020 income tax, Union Budget 2020,Budget 2020 suggestions: A separate section for deduction should be allowed for home insurance, covering both the house and its contents.

Budget 2020 expectations: One life risk that can have a huge material implication on one’s financial life is a medical exigency. The medical inflation is already increasing rapidly and is perceived to be higher than the general rate of inflation in the country. Meeting the cost of hospitalisation as out-of-pocket expense puts a lot of burden on the household budget. One major illness, in the absence of adequate health insurance, is capable of draining the entire family savings and is enough to push the family into debt. Adequate and the right health insurance product is, therefore, a necessity for the household savings to grow and participate in the nation’s growth. As far as what the health insurance expects from Budget 2020, FE Online got in touch with industry players. Here is what, in an e-mail interview, Warendra Sinha, MD & CEO, IFFCO Tokio General Insurance Company had to say.

Do you expect the tax benefit on health insurance premium to increase in the upcoming Budget 2020?

Yes, we do expect the limit to increase as it has been unchanged for over five years. At the same time, healthcare costs, as well as premiums, have increased. So it is appropriate now that the current limit of Rs.25,000 be increased to Rs.75,000. Moreover, the limit for senior citizens should also be increased to Rs 1 lakh, considering premium rates are higher for the age category. The current limit for senior citizen under the section is only Rs 50,000.

With rising healthcare costs, do you think additional tax benefits need to be there for health coverage?

Yes, with the rising healthcare costs the limit for tax benefit should also be increased correspondingly. Moreover, there has been a rise in the incidence of critical illnesses. Considering that the cost of treating life-threatening diseases is generally much higher compared to the cost of treating common ailments, a higher deduction limited should be allowed under the health insurance section.

Is the levy of GST keeping the cost of insurance high? Should the government consider any relaxation?

We feel that individuals should be spared from the GST burden as they have availed insurance for the protection of their health. The removal of GST will also bring down the cost of a policy, making health insurance affordable for policyholders.

What is your expectation regarding home insurance from Budget 2020?

The frequency and severity of natural calamities like cyclones and storms, etc, have increased over the last few years. A separate section for deduction should, therefore, be allowed in Budget 2020, for home insurance, covering both the house and its contents. Considering, almost a whole life savings goes to build a home, there is a need to protect the assets against natural calamities. This would give a boost to Insurance penetration as well, besides protecting the consumers interest.

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