Union Budget 2021 expectations for health, life insurance: In the wake of COVID-19 pandemic, the insurance sector is hopeful that Finance Minister Nirmala Sitharaman will announce measures that will help increase the number of life and health insurance policyholders
Union Budget 2021 expectations: Here's what experts suggest for budget 2021.
Union Budget 2021 expectations for health, life insurance: In the wake of COVID-19 pandemic, the insurance sector is hopeful that Finance Minister Nirmala Sitharaman will announce measures that will help increase the number of life and health insurance policyholders in the country. People’s interest in these insurance policies has grown considerably during the pandemic. Certain policy measures may further boost this interest.
While noting that the regulatory environment has been extremely supportive to expedite people’s claims during the Coronavirus outbreak, experts suggest increasing section 80C and 80D limits could help in increasing the insurance penetration further across the country.
“With Covid, the importance of health and life insurance has been inevitable, but a large part of the population still remains uninsured or underinsured, both of which are very risky for their healthy financial future. A great tax saving impetus towards insurance in 80C and 80D would surely help in increasing the insurance penetration in Tier 2 cities and beyond, where the matter is even more prevalent,” Dhirendra Mahyavanshi, co-founder, Turtlemint, told FE Online.
Anuj Mathur, MD and CEO, Canara HSBC OBC Life Insurance, also suggested an increase in section 80C, 80D limits. “In this budget, we also look forward to FM increasing the existing limits for Section 80C and 80D or should introduce new scheme(s) to encourage a self-securing environment in India,” he said.
According to Mahyavanshi, the Regulatory framework has been extremely supportive in 2020 during the pandemic to ensure that insurers expedite COVID claims and do not reject the same without proper due diligence.
The IRDAI introduced the standardization of health insurance products with Arogya Sanjeevani and also initiated the quick launch of Corona Rakshak and Corona Kavach plans with very affordable premiums to provide coverage to a higher number of people.
Also, to promote technological advancement in the FinTech space, the Regulatory Authority has been supportive of the Regulatory SandBox wherein the InsureTech startups can innovate different technological enhancements within the regulatory framework of the IRDAI to benefit the policyholders.
“However, there are certain initiatives that the Government can consider in 2021 to educate the average people of India about including insurance as an important part of their financial portfolio,” said Mahyavanshi.
Insurance plays an important role in Financial Risk Management for a family. In the ongoing pandemic, insurance has played a very important role in securing the future of an individual’s family and his/her loved ones. Hence, experts say that both life and health insurance are must, specially for unprecedented situations like COVID pandemic.
“We believe that there is a need for special focus and attention to provide stimulus to the insurance sector so that citizens are able to secure themselves. At least for the next 3-5 years, there should be additional focus on Life and Health Insurance schemes and stimulus,” said Mathur.
“In addition to this, the government may also consider revision in GST structure for insurance products and certain relaxation on existing 18% GST on premiums. Protection premiums are already increasing due to reinsurance premium hikes and Covid impact, so relief is required to ensure that customers are able to protect themselves with limited cost impact on their stretched household budgets,” he added.