Budget 2025 Expectations: The cost of treatment is increasing, and the number of people taking insurance policies is less in terms of the country’s population. In such a situation, strict steps are expected to be taken in the Union Budget 2025 to promote the insurance sector. Let us know what is the big demand of the country’s insurance sector for better growth.
Budget 2025 Expectations Insurance Sector: The Indian health sector is also hopeful of the Union Budget 2025. The sector hopes that in the upcoming budget, the government will take such decisions that will encourage more and more people to take insurance policies. This can be done by reducing GST on health insurance premium and giving tax exemption under section 80D. The performance of Indian insurance companies was mixed in 2024. Some companies made good profits, while some suffered losses.
If we look at the performance of insurance companies in 2024, General Insurance Corporation of India (GIC) gave a great return of 44 percent, while ICICI Lombard and ICICI Prudential Life Insurance also performed well.
On the other hand, the return of Life Insurance Corporation (LIC) was only 7 percent. Some companies like SBI Life, HDFC Life and Star Health suffered losses. This makes it clear that the situation in the insurance sector is very different.
Now the insurance sector hopes that some necessary reforms will be made in the upcoming budget 2025, which can be beneficial for the insurance takers and the companies. Let us know what are the major demands of the insurance sector:
Demand to reduce GST on health insurance
Insurance experts want the GST rate on health insurance and term insurance to be reduced. At present, 18 percent GST is levied on health insurance, which makes it expensive for people to take insurance. If GST is reduced, then health insurance will reach more people and more people will be able to take advantage of it. This will encourage people to take health insurance.
Demand for reform in section 80D
Tax exemption is available on health insurance premium under section 80D, but this exemption is very limited. The industry demands that it should be increased from Rs 25,000 to Rs 50,000, so that people can take more health insurance. Especially for senior citizens, this exemption should be increased to Rs 1,00,000. Apart from this, this exemption should also be applicable in the new tax regime.
Need to create a separate hospital regulator
Another big challenge facing insurance companies is the increasing cost of treatment (Medical Inflation). This means that the cost of hospitals is constantly increasing. Insurance companies can change the price of their products only once in three years.
Therefore, experts say that a separate regulatory body should be formed to fix the price at the hospital level. This will bring transparency in the services provided by hospitals and the money they charge and it will be easier for insurance companies to fix the price of the product.
Separate tax rebate should be given on life insurance
Insurance companies say that a separate tax rebate should be given for life insurance premium. Till now this exemption is given under section 80C, but if it is separated, people will buy more life insurance. This will benefit the policyholders and will also boost the insurance sector.
Changes in income tax slabs and exemptions
One of the demands of the insurance sector is that the income tax slabs and exemption limits should be revisited so that people have more disposable income. This will enable more people to invest in insurance, and the insurance market will grow. Not only will the insurance sector see growth, but people will also get security.
