Insurers seek more tax sops to up coverage

4 months ago 12

HYDERABAD: Insurers are rooting for income tax sops for individuals in the upcoming Budget to boost insurance penetration in the country. The move comes at a time when awareness about having an insurance cover for protection from uncertainties such as the pandemic has hit a high.
Future Generali India Insurance MD & CEO Anup Rau said the government can consider increasing the limit for health cover under section 80D from Rs 25,000 to Rs 1.5 lakh for self and family as it can help in deepening penetration of this category. “Rising medical costs and the increase in the incidence of critical illnesses make it an unmanageable expense for middle-income and lower-income groups. So, a higher tax deduction limit for health insurance plans is the need,” he said.

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Meanwhile, on the life front, Edelweiss Tokio Life Insurance ED Subhrajit Mukhopadhyay mooted that premium paid for this product must not be clubbed with other investments that are eligible for deduction under the 80C provision. Instead, the government must come up with a separate provision for this category.
“Life insurance is a long-term solution, unlike other financial products which have a shorter investment horizon and are covered under the 80C provision. Currently, all financial purchases are clubbed under the same I-T deduction section (80C) capped at Rs 1.5 lakh. We expect the Budget to consider creating a separate section for tax deduction on premium paid towards life insurance,” he said.
He also suggested that special incentives be considered for women who currently account for barely over one-third of the country’s life insurance covers.

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