By Tarun Chugh- MD & CEO, Bajaj Life Insurance
Chandigarh, Jan 23: “As the Union Budget approaches, it presents an opportunity to strengthen life insurance as a long-term savings and retirement solution through more consistent and equitable policy support. Recent policy measures, such as the exemption of insurance premiums from GST, have laid a strong foundation for sectoral growth, and the Budget can build on this momentum through thoughtful, outcome-oriented measures.
India’s insurance sector has made steady progress, but penetration and coverage gaps remain significant, particularly in retirement planning and rural protection.
Aligning the tax treatment of insurance annuities with other pension instruments, such as taxing only the returns on annuity payouts and extending comparable deductions, would allow individuals to choose retirement products based on suitability rather than tax differences. Similarly, bringing parity in taxation between traditional and unit-linked life insurance policies can simplify the tax framework and encourage disciplined, long-term wealth creation alongside protection.
Improving affordability in rural and social insurance segments is equally important. Rationalising transaction costs, including stamp duty exemptions for low-ticket policies, can help expand access and deepen insurance penetration.
With these policy measures, life insurance can play a stronger role in building retirement security, financial inclusion and long-term resilience for Indian households.”
