Deepak Mittal
Address the tax discrimination against pension and annuities
At various forums, Government of India has expressed its eagerness to boost the financial savings in the country and Insurance industry is one of the best placed to channelize long term financial savings. One of the important customer needs which drives savings behaviour is Retirement planning. This becomes even more important in a country like India because of increasing life expectancy and inadequate social security measures. Insurance industry plays a very important role through pension and annuity products. The current tax laws adversely discriminate against pensions and annuities and thereby create a disincentive for retirement planning through these products. We expect that this long standing anomaly will be corrected and this will help customers in saving effectively for their retirement needs.
Operationalization of Universal KYC and Single de-mat account across asset classes
Finance minister in his maiden budget speech had announced the concept of Universal KYC and a single demat account across asset classes. This is a powerful idea and if implemented well will be a big ease to customers of financial products across BFSI sector. We look forward to further clarity and operationalization of this initiative.
Modify the sum assured to premium ratio for availing tax benefits
Tax benefits in respect to life insurance policies are available only in cases where the Sum Assured to Premium Ratio is at least 10. While this provision was made with the intention to increase the cover provided by life insurance companies, it also ends up making the policies unattractive for middle and higher age groups given that there is an exponential rise in the cost of mortality in later years. We look forward to some relaxation in these guidelines either in form of tax benefits linked to the tenure of the policy or lower multiples for higher age customers.
The author is MD & CEO of Edelweiss Tokio Life Insurance
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