Tag: insurance

FM proposes to do away with tax exemptions on high value life insurance policies

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New Delhi: Maturities of life insurance policies with an annual premium of Rs 5 lakh and above taken after April 2023 will now be taxed after Finance Minister Nirmala Sitharaman removed the tax exemptions on them.
For better targeting of tax concessions and exemptions, Sitharaman in her Budget on Wednesday proposed to cap deduction from capital gains on investment in the residential house to Rs 10 crore.
“Another proposal with similar intent is to limit income tax exemption from proceeds of insurance policies with very high value,” she said.
The proposal is “to provide that where aggregate of premium for life insurance policies (other than ULIP) issued on or after 1st April 2023, is above Rs 5 lakh, income from only those policies with aggregate premium up to Rs 5 lakh shall be exempt”.
This will not affect the tax exemption provided to the amount received on the death of a person insured. It will also not affect insurance policies issued till March 31, 2023, the minister said.
Nidhi Manchanda, Certified Financial Planner, Head of Training, Research & Development at Fintoo, said that one of the major setbacks that are given in the finance bill is related to the taxability of the maturity proceeds of a life insurance policy.
“One should note that if an individual has more than one life insurance policy, which is issued on or after the 1st of April 2023 and also if the aggregate amount of premium of such policies exceeds Rs 5 lakh, then the maturity amount will be taxable,” Manchanda said.
The memorandum to the Finance Bill 2023 said that over the years, it has been observed that several high net-worth individuals are misusing the exemption provided under clause (10D) of section 10 of the Act by investing in policies having large premium contributions (as it is acting as an investment policy) and claiming exemption on the sum received under such life insurance policies.

Kapil Mehta, a co-founder, SecureNow Insurance Broker, said the proposal will dampen the interest of individuals to buy high-value traditional insurance. The government’s proposal may, however, increase the focus on term plans and pure risk covers, which is good.
“A concern is that it should not result in a significant shift towards purely investment-oriented unit link insurances,” he said.
Following the announcement in the Budget Speech, shares of ICICI Prudential Life Insurance Company dropped 10.97 per cent to close at Rs 402.55 on the BSE.
HDFC Life Insurance Company Ltd fell 10.96 per cent, Max Financial Services Ltd (9.45 per cent), SBI Life Insurance Company Ltd (9.31 per cent) and Life Insurance Corporation of India (8.38 per cent).
Life insurance stocks witnessed significant selling-on-demand concerns as the budget proposals made life insurance schemes less appealing as a tax-saving instrument, said Cyril Charly, Research analyst at Geojit Financial Services.
In order to curb misuse of the existing provisions, the memorandum said: “It is proposed to tax income from insurance policies (other than ULIP for which provisions already exist) having premium or aggregate of premium above Rs 5,00,000 in a year. Income is proposed to be exempt if received on the death of the insured person”.
The minister also proposed that a TDS at the rate of 20 per cent will apply on the withdrawal of taxable components from Employees’ Provident Fund Scheme in case of non-submission of PAN. Currently, such withdrawals attract TDS at the rate of 30 per cent.
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( With inputs from www.siasat.com )

February 1, 2023
No more tax exemption for Insurance policies where premium is above Rs 5L

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Delhi: Insurance policies where the premium is over Rs 5 lakh will no longer be tax-exempt, as per the provisions in the Union Budget 2023-24.
Kapil Mehta, Co-founder, SecureNow Insurance Broker said the income from traditional insurances where the premium is over Rs 5 lakh will not be tax exempt. While, this will dampen the interest of individuals to buy high value traditional insurances, it will increase the focus on term plans and pure risk covers which is good.
A concern is that it should not result in a significant shift towards purely investment-oriented unit link insurances, Mehta said.
Arihant Bardia, CIO and Co Founder, Valtrust said if premium paid on insurance policies (excl. ULIP) exceeds Rs 5 lakh in a year, then the proceeds from those policies will be taxable (except in case of death benefit).
Bardia said this is negative for insurance — as it will impact savings products which are usually high value and margin products (though not protection). However, smaller policies remain unaffected. Overall a negative for insurance companies as it will impact the high value premium policies — thus impacting overall industry GWP growth.
A similar provision was already introduced for ULIPs in 2021 wherein the aggregate premium was restricted to Rs 2.5 lakh in a year for tax exempt proceeds”, said Bardia.
Mehta said improvements in ease of doing business specifically, the changes pertaining to simplification of the KYC process, one stop solution for identity and address updating, common business identifier, unified filing, and entity digilocker will make placement of insurances easier. Claims payment would also be facilitated.
Changes in personal income tax will increase personal disposable income. This will result in individuals ability to buy better, higher value insurances to manage their risk, Mehta said.

(Sanjeev Sharma can be reached at Sanjeev.s@ians.in)
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( With inputs from www.siasat.com )

February 1, 2023
Health insurance coverage of up to SAR 100,000 for Umrah pilgrims
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Riyadh: The Kingdom of Saudi Arabia’s Ministry of Haj and Umrah, has announced that Umrah pilgrims can take advantage of many benefits during their stay in the Kingdom, including health insurance coverage up to a maximum of Saudi Riyals 100,000 (Rs 21,68,209).
The health insurance policy for Umrah pilgrims, which was recently approved by the Ministry of Hajj and Umrah, specified eleven health insurance benefits available to pilgrims throughout their stay in the Kingdom, Okaz reported.
Here are the benefits for Umrah pilgrims
The pilgrims can benefit from the maximum coverage of 100,000 Saudi riyals in the event of hospitalization or medical evacuation inside and outside the Kingdom.
There will be maximum coverage for daily hospital accommodation and patient subsistence, including the cost of a bed, nursing care, medical visits and medical supervision.
Accommodation services also include the cost of medicines and medical supplies that are provided according to the doctor’s prescription, with a shared room, with a maximum cost of 600 Saudi Riyals.
The maximum daily accommodation and living for the patient’s companion under the document is a shared room with a maximum daily cost of 150 Saudi Riyals.
Health insurance benefits also include emergency pregnancy and childbirth expenses, with a maximum limit of 5,000 Saudi Riyals during the policy period.
Travel expenses of a first-degree relative of the patient with a maximum of 5,000 Saudi Riyals during the policy period.
Expenses for emergency dental treatment up to a maximum of 500 Saudi riyals during the policy period.
Treatment of premature newborns without exceeding the maximum policy of the mother.
Traffic injuries are covered with a maximum limit.
Expenses for emergency dialysis with cap coverage; and medical evacuation inside and outside the Kingdom with the maximum coverage of the policy.
The coverage also includes the cost of returning the bodies of the pilgrims to their original homes, with coverage not exceeding a maximum of 10,000 Saudi Riyals.
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( With inputs from www.siasat.com )
January 24, 2023
Saudi Arabia: Up to SR100,000 Health Insurance Coverage for Umrah Pilgrims – Kashmir News

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Saudi Arabia: Up to SR100,000 Health Insurance Coverage for Umrah Pilgrims
Saudi Arabia: Umrah pilgrims can now enjoy a number of privileges during their stay in Saudi Arabia, including a maximum health insurance coverage of SR100,000, according to local media.
The Ministry of Hajj and Umrah recently authorized the Umrah pilgrims’ health insurance policy, which lists 11 health insurance benefits available to pilgrims throughout their stay in the Kingdom.
The benefits also include the following cases: There will be maximum coverage for daily accommodation in hospital and subsistence of the patient, including the cost of the bed, nursing care, medical visits, and medical supervision.
The accommodation services also include the cost of medicines and medical supplies that are given according to doctor’s prescription, with a shared room, costing a maximum of SR600.
The daily accommodation and subsistence limit for the patient’s companion under the policy is a shared room with a maximum daily cost of SR150.
The health insurance benefits also cover pregnancy and emergency birthing expenditures up to a limit of SR5,000 during the policy period.
The travel expenses for a first-degree relative of the patient with a maximum amount of SR 5,000 during the policy period.

The expenses for emergency dental treatment cases with a maximum amount of SR500 during the policy period.
The treatment of premature newborns and this is without exceeding the maximum limit of the mother’s policy.
The injuries resulting from traffic accidents, with a coverage of the maximum limit.
The xpenses for dialysis in emergency cases with a coverage of the maximum limit; and medical evacuation within and outside the Kingdom with a coverage of the maximum limit of the policy.
The policy also covers the expense of returning pilgrims’ bodies to their native homes, up to a maximum of SR10,000.
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#Saudi #Arabia #SR100000 #Health #Insurance #Coverage #Umrah #Pilgrims #Kashmir #News
( With inputs from : kashmirnews.in )

January 24, 2023