Union Minister Nitin Gadkari’s current letter to the Union Finance Minister, forwarding a memorandum from the Nagpur Life Insurance Union, highlights an immediate concern — the imposition of an 18% Goods and Services Tax (GST) on life and medical insurancecoverage premiums.
The memorandum characterises this tax as a problem on life’s unpredictabilities and a deterrent to the development of medical insurancecoverage. While the concept of excusing insurancecoverage premiums from GST is appealing from a social viewpoint, recommending that necessary services must be tax-free, the wider ramifications of such a policy warrant mindful factortoconsider.
At veryfirst look, the concept of absolutelyno tax on life and medical insurancecoverage appears advantageous, liningup with the goal of making important services more available. However, extending this reasoning to its natural conclusion exposes a variety of obstacles. If insurancecoverage premiums are exempt from tax due to their social requirement, this reasoning might be used to a widerange of services. Essential energies like water, electricalpower, and sanitation might likewise be argued to benefit tax-free status.
Government services, too, supply important assistance to people; oughtto they be exempt from tax as well? Furthermore, emergencysituation medications and important care medications, which are indisputably important, would realistically follow the exactsame exemption course. The federalgovernment needsto preserve a constant and sustainable tax policy to fund public facilities and services effectively.
Is the call for tax exemption on insurancecoverage premiums an reason for the Indian insurancecoverage sector’s muchdeeper problems? Indian health insurancecoverage is infamous for its bad declares ratio and concealed provisions that can outcome in partial protection or rejection of protection. Deep customer suspect in Indian medical insurancecoverage is a growing issue, where private health insurancecoverage policies typically stopworking to provide as guaranteed.
Stories areplentiful of insurancepolicyholders offered the runaround by healthcenters and insurancecoverage business when attempting to settle claims. This prevalent problem has led to a considerable disintegration of trust in the market for specific health covers. Consumers are progressively careful, fearing that regardlessof paying substantial premiums for years, their declares may be rejected for thoughtof or complicated factors. This suspect is a significant difficulty for the insurancecoverage market, which needto address these issues to bringback self-confidence and guarantee that policies satisfy their planned function of supplying monetary security in times of medical requirement.
Insurers have often prioritised their interests over those of insurancepolicyholders, leaving numerous indiv