Budget’s Insurance Component

According to me the major highlight of the budget (apart from reduction in corporate tax over next 4 years) is governments approach to creating Social Security System in the country.

Government will launch Pradhan Mantri Suraksha Bima Yojana, will cover accidental death risk of Rs. 2 lakh for a premium of just Rs. 12 per year.

Government will also launch the Atal Pension Yojana, which will provide a defined pension, depending on the contribution, and its period.

The third Social Security Scheme that the Minister announced is the Pradhan Mantri Jeevan Jyoti Bima Yojana which covers both natural and accidental death risk of Rs. 2 lakhs. The premium will be Rs. 330 per year, or less than one rupee per day, for the age group 18-50.

If we particularly talk about Insurance Sector. Government has raised premium exemption on Health Insurance premium from 15,000/- to 25,000/-. For senior citizens the limit will stand increased to Rs.30,000 from the existing Rs.20,000.

The Life Insurance Sector has been completely ignored in the budget. We expected a separate limit of 50,000/- on pension plans, but not to be. However, the finance minister has increased limit from 1 Lakh to 1.5 Lakh in NPS.