Page 26 - Life Insurance Today February 2018

Major announcement in BUDGET

2018-19 relating to insurance

sector

T hree public sector general insurance respect of certain critical illness from, Rs.60,000/- in case

companies National Insurance Company Ltd.,
of senior citizens and from Rs.80,000/- in case of very
United India Assurance Company Limited and
senior citizens, to Rs.1 lakh in respect of all senior citizens,
Oriental India Insurance Company Limited will
be merged into a single insurance entity and will be under section 80DDB
Extension of Pradhan Mantri Vaya Vandana Yojana up to
subsequently listed.
March, 2020 under which an assured return of 8% is given
Government will launch a flagship National Health by Life Insurance Corporation of India. The existing limit on
Protection Scheme to cover over 10 crore poor and investment of Rs.7.5 lakh per senior citizen under this
vulnerable families (approximately 50 crore beneficiaries) scheme is also being enhanced to Rs.15 lakh.
providing coverage upto 5 lakh rupees per family per year
It is proposed to provide that in a case where premium for
for secondary and tertiary care hospitalization. This will be
the world’s largest government funded health care health insurance for multiple years has been paid in one year,
the deduction shall be allowed proportionately over the
programme. Adequate funds will be provided for smooth
years for which the benefit of health insurance is available.
implementation of this programme.
Pradhan Mantri Jeevan Jyoti Beema Yojana (PMJJBY) has Quick Observations
benefitted 5.22 crore families with a life insurance cover 1. Major decision to merge 3 Public sector General
of Rs.2 lakh on payment of a premium of only Rs.330/- per Insurance Companies into 1 company. This will help to
annum. Likewise, under Pradhan Mantri Suraksha Bima reduce loss and unhealthy competition among the 3 PSU
Yojana, 13 crore 25 lakh persons have been insured with companies. This will be a mammoth task as there will
personal accident cover of Rs.2 lakh on payment of a be some resistance from employees as they may fear
premium of only Rs.12 per annum. The Government will layoff. However their will be economy of operation.
work to cover all poor households, including SC/ST
2. No change in deduction under section 80C
households, under these in a mission mode.
3. No change in deduction under section 80D for
The Government will expand the coverage under Prime
comman man. Exemption limit increased to Rs.50,000
Minister Jan Dhan Yojana by bringing all sixty crore basic for senior citizens under section 80D
accounts within its fold and undertake measures to provide
services of micro insurance and unorganized sector pension 4. Launch of National Health Protection Scheme to cover
schemes through these accounts. over 10 crore poor and vulnerable families
(approximately 50 crore beneficiaries) providing
Raising the limit of deduction for health insurance premium coverage upto 5 lakh rupees per family per year for
and/ or medical expenditure from Rs.30,000/- to Rs.50,000/ secondary and tertiary care hospitalization. It needs to
, under section 80D for Senior Citizens. All senior citizens be seen what would be the proposed premium. Will
will now be able to claim benefit of deduction up to
government insurance companies handle this scheme.
Rs.50,000/- per annum in respect of any health insurance If the rates are too low it may bring huge financial
premium and/or any general medical expenditure incurred. burden on government insurance companies unless it
Raising the limit of deduction for medical expenditure in is adequately supported by government. T

26 February 2018 Life Insurance Today

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