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News18
2 days ago
- Business
- News18
GST Waiver On Insurance Premiums May Backfire, Push Prices Higher, Industry Players Warn
Last Updated: The GST Council may exempt term life and senior citizens' health insurance premiums from GST to boost adoption. Experts have mixed reactions, citing pricing increases and ITC loss. News18 In a big overhaul, the GST Council is mulling to exempt the 18% taxation of term life insurance premiums and health insurance premiums for senior citizens, aimed at boosting insurance adoption, especially among the elderly and middle-income groups. Currently, term life insurance premiums and all health insurance policies attract an 18% GST. However, a panel of ministers has proposed a full exemption for: term life insurance premiums for all policyholders, regardless of age; and health insurance premiums for senior citizens (above 60 years), with no upper limit on the sum insured. A large consensus of industry players is expecting that the move would lead to expand penetration and wider adoption among seniors and the middle class. However, R Balasundaram, Secretary General, Insurance Brokers Association of India (IBAI) calls it 'guarded optimism'. He said that insurers have already expressed that a zero GST on policies could lead to an increase in pricing, as the benefits of input tax credit of GST will not be available to them. Insurance premiums have been rising sharply—by 20–25% in some cases—while penetration remains low. Fewer than 40% of Indians have health insurance, and life insurance penetration is below 4%. Penetration of term life and health insurance remains extremely low, largely due to high age-related premiums, inflationary pressures, and the burden of GST, explained Surinder Bhagat, Head- Employee Benefits, Large Account Practices, Prudent Insurance Brokers. He believed that a move to zero GST from a high 18% can be transformative- it will make coverage more affordable for seniors, expand penetration, and encourage uptake of higher coverage limits. Sharad Mathur, Managing Director and CEO, Universal Sompo General Insurance said the move could lead to savings up to 18% annually for individuals. This could boost insurance adoption among seniors and the middle class, he added. Uncertainty Over Input Tax Credit A large consensus of experts are worried on the elimination of input tax credit (ITC) that could lead operational expenses and compress margins. For the industry, it may increase demand but slightly compress margins unless input tax credits are adjusted, said Mathur. Overall, the move is strongly positive for consumers and industry growth, though insurers must adapt to mitigate the ITC loss, emphaised Vaibhav Kathju, Founder of Inka Insurance. view comments First Published: News business » banking-finance GST Waiver On Insurance Premiums May Backfire, Push Prices Higher, Industry Players Warn Disclaimer: Comments reflect users' views, not News18's. Please keep discussions respectful and constructive. Abusive, defamatory, or illegal comments will be removed. News18 may disable any comment at its discretion. By posting, you agree to our Terms of Use and Privacy Policy. Loading comments...
News18
03-06-2025
- News18
Flight Delays, Floods, And Cancellations: What Travel Insurance Really Covers
Last Updated: Experts stress the need for comprehensive travel insurance in India due to rising climate uncertainty. Discover what it covers and why it's essential. Travel Insurance In India: When planning trips to domestic or international destinations, the idea of purchasing travel insurance rarely crosses the minds of many Indian travelers. They often consider it an unaffordable luxury due to budget constraints. However, unpredictable weather and increasing climate uncertainty are starting to change this perspective. Experts say the need for comprehensive coverage is growing, especially in the face of rising climate uncertainty. What Does Travel Insurance Cover? Travel insurance is traditionally known for covering medical emergencies, accidents, and loss of baggage or documents. However, its importance during weather-related disruptions is being increasingly considered. 'Flights may be cancelled for various reasons, including inclement weather, but travel insurance doesn't cover weather itself—it covers the consequences like trip cancellation or delay," explains R Balasundaram, Secretary General of the Insurance Brokers Association of India (IBAI). He also clarifies that cancellations by tour operators in package trips are not recoverable under most policies. Extreme Weather and Claims According to Vivek Chaturvedi, CMO & Head of Direct Sales at Digit Insurance, 'Flight delays and trip cancellations are the most common claims during extreme weather events like floods or heavy rain. Such incidents directly disrupt travel plans and trigger insurance claims if delays exceed the minimum time specified." He adds that travel insurance can also support in rare but severe cases like accidents at airports or natural disasters. Post-pandemic and amid climate disruption, travelers are opting for more robust insurance. 'Many now prefer higher sum-insured policies—ranging from $250,000 to $500,000—to cover medical costs, fraud, or last-minute cancellations," Chaturvedi says. First Published: June 03, 2025, 11:09 IST
