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As Finance Minister Nirmala Sitharaman prepares to present the Union Budget 2025 on February 1, Insurance sector leaders are advocating for additional sops and tax incentives to boost health insurance penetration. Industry expectations include targeted incentives for corporate entities to enhance employee benefits through comprehensive health insurance plans. Additionally, industry leaders believe these measures could strengthen the country’s economic resilience while accelerating the adoption of health insurance and enhancing financial security across India.
Read the Union budget 2025 expectations in detail:
Mukul Bhatia, Managing Director, Head of Corporate Solutions Group, Lockton India.
The Union Budget 2025 offers a significant opportunity to accelerate the adoption of health insurance and enhance financial security across India. By introducing additional sops and tax incentives for individuals and corporate entities, the budget can boost health insurance penetration, aligning with the national vision of achieving universal insurance coverage by 2047. This would ensure greater financial protection for all.
Targeted incentives for corporate entities to provide enhanced employee benefits, such as comprehensive health insurance plans, can further strengthen the country’s economic resilience.
Additionally, with the increasing frequency of natural disasters, promoting disaster resilience through incentives for catastrophe insurance products can facilitate timely recovery and reduce financial losses, particularly in high-risk regions. Our vision at Lockton India is to provide innovative insurance solutions, and believe that progressive reforms in this budget can enable the insurance sector to play a crucial role in creating a secure and inclusive future.
Introducing a separate tax exemption for term insurance premiums can redefine how individuals perceive life insurance, encouraging families to safeguard their financial future. Similarly, offering incentives for employers to provide group term insurance plans and allocating budgetary support for low-income group term insurance schemes can extend life coverage to underserved communities. Such initiatives not only protect vulnerable populations but also strengthen the nation’s financial resilience in times of crisis.
On the investment front, revising tax policies for equity, debt, and gold schemes can unlock significant growth potential. For equity-linked schemes, raising the ELSS limit to ₹3 lakh and increasing the LTCG exemption threshold—up to ₹10 lakh for long-term holdings—will reward patient investors and encourage wealth creation.
Reinstating the LTCG benefit for debt schemes at a modest 10% tax rate without indexation can revive interest in this category. Introducing parity between physical gold and gold schemes through LTCG provisions will attract more investors to this vital asset class. These measures reflect a balanced approach to empowering investors while fostering economic inclusivity and growth across all financial segments.