Budget 2023: Right now insurance products are not accessible to a large section of the population. Especially not many people have health policy. In view of the increasing expenditure on treatment, the importance of health policy has increased. Government should announce measures to make health policy affordable
Budget 2023: The year 2022 was good for the insurance sector. IRDAI took several steps of reforms for the industry. The government also tried to open the industry. Measures were taken to give more options to the policyholders. In last year’s budget, the government increased the FDI limit in the industry to 74 per cent. This was a major step to increase the reach of insurance products in the country.
Experts say that the government will have to continue efforts to increase the reach of insurance. As of now, insurance penetration in India is a very small segment of the population as compared to developed countries. Finance Minister Nirmala Sitharaman will present the Union Budget on 1 February . It is expected that she will make many big announcements for the insurance industry.
Experts say that the government can take steps to further open up the insurance sector. There is also a need to simplify the rules. Amending the Insurance Act and Insurance Regulatory and Development Act will increase the growth of this industry. The government may take steps to issue composite licenses to insurance companies and make health insurance as compulsory as motor insurance.
Experts in the insurance industry say that there is a need to reduce GST on premiums for life insurance products. Now it is 18 percent. It needs to be reduced to 5 per cent. This will make insurance products cheaper. This will increase the interest of people in buying insurance products. Right now it is difficult for people with low income to buy insurance products. Health insurance products, in particular, remain out of reach for a large section of the population. Making them cheaper will increase their reach.
The Finance Minister should also announce an increase in the deduction limit under section 80CCC. Now this limit is Rs 1.5 lakh. It needs to be increased to Rs 2.5 lakh. Under this section, tax deductions are available on contributions to certain PPF, life and pension funds. There is also a need to increase the deduction limit for health insurance. The deduction limit on health policy under section 80D is currently Rs 25,000. It needs to be increased to Rs 1 lakh.
