PolicyBazaar has suggested that the Finance Ministry give separate tax relief to those buying pure life insurance cover or term insurance.
PolicyBazaar has urged the government to introduce a separate tax deduction of Rs. 20,000 for pure life insurance cover beyond the existing Section 80C deduction of Rs. 1.5 lakh.
Yashish Dahiya, Founder and CEO of PolicyBazaar, told that the government should give tax benefits to people who want to invest in pure life insurance. “It is one of the best things to do. It will also create a favourable environment for pure life insurance… Only 8 per cent of the people in India are covered by insurance, which includes health and other ULIPs.
“Health insurance has a slab. So, why not have a slab for term insurance,” Dahiya said, adding that more and more people will get insured for Rs.1 crore cover by paying as low as Rs.9,000 in their thirties, and tax benefit would further expand the market. Dahiya said that not even a per cent of what insurance companies sell would be pure life or term insurance and many of the people are not even aware of what kind of products they are buying.