Just one note can make life insurance and mediclaim premiums cheaper, know why

BJP leader and Union Road Transport and Highways Minister Nitin Gadkari has appealed to Union Finance Minister Nirmala Sitharaman. He has demanded the finance minister to remove 18 per cent GST on life and medical insurance premiums. In a letter to Sitharaman, Gadkari said the Nagpur Division Life Insurance Corporation Employees Union had submitted a memorandum to him on these issues. He also said that imposing 18 per cent GST on life and medical insurance premiums is 'like taxing the uncertainties of life.'

'18 per cent GST is a hindrance to growth'

Gadkari said in his letter that the union believes that insurance premiums should not be taxed to enable people to buy cover against this risk. He said that similarly 18 percent GST on medical insurance premium is proving to be a hindrance to the growth of this sector of business, which is socially necessary.

Nitin Gadkari further said that the union also raised the issue of treatment for savings through life insurance, reintroduction of IT deduction for medical insurance premiums and merger of public sector general insurance companies.

He also said that paying GST on life and medical insurance premiums is a challenge for senior citizens. Gadkari in his letter said, “You are requested to consider the proposal to withdraw GST on life and medical insurance premiums on priority basis as it is burdensome to senior citizens as per rules along with other related issues. Proper verification should also be done. Done.”

Demands have already been made to rethink the GST

This is not the first time that Nirmala Sitharaman has been requested to reconsider the GST levied on health insurance premiums. In June this year, the Confederation of General Insurance Agents Associations of India appealed to the government to reduce GST on individual medical policies from 18 percent to 5 percent. Association of Non-Life Insurance Agents said this will help encourage people to buy these policies as a measure of social security. The organization also stated that health insurance premiums have almost doubled in the last 5 years.

The association, in its letter to Sitharaman, said policy renewal rates are declining due to continuous increase in premium rates and medical inflation. In its letter to Sitharaman, the association said, “The average percentage of renewal of retail health insurance policies is 65 to 75 percent. This clearly shows that most of the policyholders are unable to pay the premium due to continuous increase in insurance premium and cannot afford the very high rates of GST.”