Insurance industry plans to sell more term products under new tax structure

In the past couple of years, life insurers, mainly private players, have been pushing protection products to improve margins as these term plans enjoy a higher margin

Insurance has historically been a “push product” and despite the best efforts of the regulator and the various life insurance companies, it has failed to see pull from customers. One of the biggest incentives for buying insurance has been the tax exemption under section 80C of the Income Tax Act. In the Union Budget 2020, the Finance Minister introduced an alternative lower taxation regime wherein a taxpayer can choose a lower tax rate but will have to forgo most of the deductions they enjoy under the existing tax regime.  

This has sparked a debate in the life insurance industry. One side