The Union Budget 2025, set to be presented on February 1, is expected to introduce reforms aimed at supporting the growth and accessibility of the insurance sector in India. With the industry witnessing growth in recent years, experts are looking forward to measures that could enhance financial inclusion and security.
Jude Gomes, MD & CEO of Ageas Federal Life Insurance, highlighted the 11% growth rate in the sector, which has reached premiums of $107 billion.
He expressed optimism about the upcoming Budget, with several key areas of focus that could foster further development:
Tax relief for annuity plans
The insurance industry is hoping for tax relief on annuity and pension products, including those under the National Pension System (NPS), to encourage greater retirement savings.
Enhanced tax benefits for life and health insurance
Gomes advocates for a separate tax deduction limit for insurance premiums under Section 80C, which could make insurance more accessible to a wider range of families.
GST reforms for greater access
The sector also anticipates changes to the GST on term life insurance policies to reduce costs and improve access to essential protection plans.
Universal digital insurance accounts
A proposal for a government-backed Digital Insurance Repository System could streamline policy management and claims processing.
Retirement security bonds
The introduction of long-term retirement security bonds is another area that could help drive long-term savings, with tax-free maturity benefits.
Flexible microinsurance framework
The insurance sector hopes for guidelines that will allow microinsurance products to better serve rural and informal sectors.
Incentives for insurtech innovation
Fiscal benefits for insurtech companies could help modernise underwriting, claims, and risk management processes.
Public-private partnerships for insurance awareness
Finally, experts are calling for joint government-insurer campaigns to improve insurance literacy, particularly in smaller cities and rural areas.
First Published: Jan 3, 2025 6:34 PM IST
