Budget
Expectation Quote 2026 by Satishwar B., MD & CEO, Bandhan Life
 |
| Satishwar B., MD & CEO, Bandhan Life |
One of
the most welcome reforms in 2025 was the government’s decision to remove GST on
life insurance. This has made life insurance about 18% more affordable,
encouraging more people to secure their families’ futures. While insurers have
faced increased operational costs due to the loss of Input Tax Credit (ITC), I
am hopeful that increased demand driven by better affordability will help
offset this impact.
For the
upcoming Union Budget, we have three key expectations that will not only
benefit the life insurance industry but also help improve financial security
for millions of Indians:
1. Better
Tax Benefits for Protection and Health Insurance
To
accelerate insurance penetration and achieve the vision of ‘Insurance for
All by 2047’, we are hopeful that the government will consider enhancing
tax benefits on life and health insurance. Specifically, we recommend either
increasing the current limit or introducing a separate, dedicated section
for life insurance premiums.
It is also crucial that these tax benefits be extended to both the old and
new tax regimes, making insurance more inclusive and accessible to all.
2. Tax
Relief on Annuity Plans
India is
facing a widening retirement savings gap, projected to reach $85 trillion by
2050 [1] .We need to
do something to fill this gap. To tackle this, the budget this year can:
- Extend the ₹50,000 deduction
to all pension and annuity products.
- Reduce tax on annuity
payouts, making retirement income more tax-efficient and attractive for
savers.
Simplifying
and enhancing tax benefits for these products will encourage more Indians to
invest in long-term income security.
3.
Increase Premium Cap for tax-free maturity for ULIPs to ₹5 lakh
Today,
ULIPs have a ₹2.5 lakh annual premium cap for tax-free maturity. We hope the
Budget will raise the ULIP cap to ₹5 lakh, same as traditional products. A
uniform cap will make tax benefits easier to understand for everyone.
With
continued policy support and forward-thinking reforms, the life insurance
sector is ready to play a stronger role in safeguarding financial well-being
and enabling long-term security for Indian families.
Quote:
“The GST
waiver has made life insurance more affordable and accessible. We’re hopeful
that this year’s Budget will continue that momentum. Better tax benefits for
protection and health plans—under both tax regimes—can help more families get
covered. We also hope to see stronger support for pension products and an
increase in the premium cap for ULIPs to Rs. 5 Lakh, similar to traditional
plans. Simple, inclusive reforms can go a long way in securing India’s
financial future and accelerate progress towards ‘Insurance for All by
2047.’”
