Budget 2019: As the sixth and the last Budget of Bharatiya Janata Party (BJP)-led NDA government is almost here and there are a lot of expectations from the FM as he announces his last budget of the current term. The Modi government pushed Health Insurance for more than 100 million vulnerable families in the year 2018 with the launch of its Ayushman Bharat-National Health Protection Scheme (AB-NHPS) providing coverage of up to Rs. 500,000.


Though the urban Indian takes care of his Health Insurance cover either himself or via employer sponsored schemes, it is the Life Insurance that individuals in India pick up for investment purpose as well as to keep the future of their families secured in the event of a mishap leading to the death of an individual.

In Budget 2019, while it will be asking for too much to expect the government to come up with life insurance plans; however, given the percentage of middle class that saves its money in Life Insurance and life insurance products like ULIPS, the government can at the least make a separate tax exemption head for life insurance products to ease the burden of tax and to further encourage the common man in investing his money while covering his family for unforeseen incidents like death that can be devastating not just mentally or emotionally but financially too.

The gross premiums for life insurance written in India reached US$ 71.1 billion in FY18. New life insurance premiums saw growth by 3.6% in the past year. The life insurance market in India has 24 life insurance companies out of which Life Insurance Corporation (LIC) is the sole public sector company. The LIC is spearheading Rs 100 crore joint initiative of life insurers and industry body Life Insurance Council to create awareness for Life Insurance. This initiative will kick off from February 2019, next month.

In Budget 2018, the Finance Minister unveiled the government’s intention to launch the world’s largest healthcare scheme, besides increasing the tax exemption limit for health insurance purchased by/for senior citizens. During Budget 2018, the government’s step for declaring LTCG tax on Equity Investments made ULIPs a preferred option for medium and long term investments. The Modi government also extended life insurance schemes like Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJY) and Pradhan Mantri Suraksha Bima Yojana (PMSBY). However, little has been done in the past years for Life Insurance plans picked by the working class in India.

For Budget 2019, the life insurance market will expand considerably in the coming years if the finance ministry comes up with some tax perks for the life insurance products to encourage its young working class which very well falls in the insurable bracket to take life insurance covers early on and enjoy the benefit of low premiums and a hefty corpus by the time they reach their 40s.

Currently, life insurance premium can be claimed under Section 80C, which has a limit of Rs.1.5 lac. A separate head for Life Insurance for tax exemption will grow awareness for life insurance products which besides giving peace of mind, promise financially sound retirement planning.