Insurers seek hike in tax exemption for higher adoption of pure risk plans

Currently, under Section 80C of the Income Tax Act, an individual can claim a deduction of the life insurance premium paid from his/her taxable income

The insurers are asking for various tax sops from the central government in the Union Budget 2022-2023 to encourage Indians to buy more pure-risk products.

Traditionally, tax exemptions have acted as a catalyst for people to buy insurance products. But there is an organic demand for insurance products, especially pure-risk and guaranteed income products, given the uncertainty associated with the pandemic.

The insurance industry, however, still wants the government to continue with tax exemptions so that enough people get insurance coverage. India continues to be a highly under-penetrated market when it comes to insurance.

Insurance penetration in India stands at 4.20 per cent