The common people were expecting from the 55th meeting of the GST Council that Finance Minister Nirmala Sitharaman and the group of ministers could reduce the 18% GST on term insurance premium to 5%. If this had happened, people would have got some relief from the onslaught of inflation.
GST Council Meeting: Common people had high expectations from the 55th meeting of the GST Council, but the decisions taken after the meeting have disappointed the common people. Actually, it was expected from this meeting of the GST Council that the government could reduce the GST rates on term insurance, but due to lack of consensus on this issue, the Finance Minister and the GMO of the Group of Ministers postponed it till the next meeting.
This much GST is levied on term insurance
Term insurance is taken for a long time. Its premium is paid on annual, quarterly and monthly basis. According to the current GST rates, 18 percent GST has to be paid on the premium of term insurance. Let us tell you that due to such high tax rates, many people avoid buying term insurance.
Common people had this expectation
From the 55th meeting of the GST Council, the common people expected that Finance Minister Nirmala Sitharaman and the group of ministers could reduce the 18 percent GST levied on the premium of term insurance to 5 percent. If this had happened, people would have got some relief from the blow of inflation.
What is term insurance?
Term insurance is a life insurance product that provides cover to a person for a fixed period (such as 10, 20, or 30 years). This insurance plan is the cheapest and simplest way of life protection. In this, in case of death of the person, the sum assured is given to his family, but if the insured person survives till that period, then no amount is returned.
Main benefits of term insurance
Low premium: Its premium is very low as compared to other insurance plans.
High coverage: Large sum assured is available at low premium.
Financial security of family: The family gets financial support on the death of the insured person.
Tax benefit: Tax benefits are available on premium payment under section 80C and 10(10D) of the Income Tax Act.
Flexibility: Add-on riders like critical illness, accidental death cover etc. can be added to it.
