A separate section for Life Insurance tax benefits under section 80C? Only time will tell. How’s 2018 going to be for the insurance industry? Let’s figure out.
Since the past few years, especially after private players took a hold of the sector, the insurance industry has undergone a sea of changes. With the immense amount of competition brought about by the private players, the insurance market has been flooded with new, innovative products.
Over the years, Life Insurance has evolved into a customer-friendly product. Today, with the increase in household incomes and low-interest rates offered by Savings Accounts, has deepened consumer interest in Life Insurance. It is no longer considered as just a risk management tool, but also as an investment avenue for the common folk.
The question, however, is whether the Life Insurance industry will show an upward trend in 2018 or not. With digitisation, more focus on bancassurance and expansion of agencies, and key expectations from the upcoming Budget, it sure looks like the Life Insurance sector is hoping to scale new heights this year.
Additional Reading: Top 5 Life Insurance Plans Of 2018
In the year that passed by…
2017 was a good year as far as the insurance industry is concerned. It could be partly or solely because of the aftermath of demonetisation that saw a rise in financial savings. The year saw an increase in the number of new policy takers, thereby resulting in an increase in the number of policies served. It is reported to have crossed the 1.5 crore mark against the 1.37 crore the year before (Source: Financial Express).
The last year saw a few regulatory changes too that further boosted the insurance industry. These changes included a revised commission and remuneration structure, reformed guidelines on e-insurance and insurance e-commerce, Life Insurance portability, introduction of a risk-based capital regime for more transparency, and more.
The Insurance Regulatory and Development Authority of India (IRDAI) also made PAN/Form 60 and Aadhaar linking compulsory for existing policyholders as well as new applicants. Apart from a lot of benefits that could be possible, Aadhaar linking will be extremely beneficial for eliminating fraudulent claims and faster claim settlements.
The customer-centric approach
Customer experience is one major weak point for the insurance sector. In 2018, insurance players will be adopting a customer-centric approach with customer engagement and customer service as key priorities.
Technology will play a big role in helping insurance players shift from the one-size-fits-all to offering customised products based on the needs of individual customers. With digitisation picking up the pace, expect e-insurance, chatbots, artificial intelligence (AI) and analytics-driven offers to take over the current insurance landscape in the country.
With innovative practices and adoption of AI techniques, the Life Insurance sector is surely going to deliver a great service that resonates perfectly with modern-day customers.
Budget 2018 and the Life Insurance industry
There are a lot of expectations from Finance Minister Arun Jaitley this year. A majority are hoping for an increase in the limit of tax benefits under Section 80C especially because most the popular investments come under this section. And a cap of Rs. 1.5 lakhs just isn’t enough.
Additional Reading: Union Budget 2018 Wishlist: Here’s What The Folks At BankBazaar Expect From The Upcoming Budget
Of course, an increase in the tax benefits limit under Section 80C will be great. But at the same time, it would be even better if Life Insurance got a separate exemption limit, like Health Insurance. Life Insurance is a key product in the market which shoulders a social objective – financial security to families on the demise of the policyholder, along with being a lucrative investment option.
In today’s uncertain world, it is necessary for people to invest an adequate amount in a Life Insurance policy. And in order to motivate people to take this step, there is need to have a separate section for term insurance exclusively (as is the trend in most other Asian countries).
On A Final Note
2018 looks good for the Life Insurance sector (or at least we’re hoping so). We, as a society, have finally realised that Life Insurance is a great risk management/savings tool. With digitisation and adoption of innovative practices, we can expect life insurers across the country to offer us a plethora of services and products in the coming 12 months.
Bonus Read: What To Look For In A Life Insurance Plan
How do you think the insurance sector is going to fare this year? Let us know in the comments section below. Or if you would rather explore and compare between term insurance plans, feel free to do so.