Budget 2020 expectations: Government should incentivize insurance sector for wider reach, experts say

Budget 2020 Expectations: What are the Budget 2020 Expectations (#BUDGET2020ZEE) in the insurance sector? Will it lead to enhanced security for customers? Zee Business experts, Joydeep K Roy, Partner & Leader at Insurance & Allied Businesses and Tarun Mathur, Chief Business Officer (CBO) at PolicyBazaar have the answers that will go a long way in helping you make you and your family that much more secure and safeguard your future.

According to the 2018 figures of the insurance regulator - Insurance Regulatory and Development Authority of India (IRDAI), the reach of life insurance has been just about 2.74% in the country. Also, there are just 1% of people who have non-life insurance policies. The overall reach of the industry is just 3.7%.

In addition, third party motor insurance has few takers. There is a low ensured risk in housing properties. There is not much interest in long term insurance plans. Therefore, overall, awareness about insurance and its benefits is very limited. In fact, experts say that 56% of people do not have any health insurance. The Below Poverty Line (BPL) segment has been included in the government health scheme. For India to realize its dream of achieving a USD 5 trillion economy, there is a need for a massive boost for insurance.

So, government will have to incentivize people to buy insurance policies, experts say. The limit of relief under Section 80D should be raised from the existing Rs 25000 to Rs 50000.  The government should also increase the limit of preventive health check-up from Rs 5000 to Rs 10000 in Budget 2020. The government should also give relief to the potential insurance seekers on GST. In this budget, the government should focus on increasing the reach of insurance.  

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Experts also expect the government to run campaigns for increasing awareness about insurance. The government should also have to give a boost to the healthcare sector and give special attention to the availability of generic medicines. They concluded by saying that the government's flagship scheme Ayushman Bharat should also get a special mention in Budget 2020.