Insurance Sector in India – 2024

Insurance Sector in India – 2024

The insurance sector of India may record the fastest growth among the G20 countries. The total premium is likely to rise at the rate of 7.1 per cent during 2024-28. At the same time, the global growth rate might be around 2.4 per cent. The demand for insurance agents and PoSP (Point of Selling Person) may also increase due to the rise in insurance demand.

Source (Business Standard)

Expert Views on Insurance Sector 2024

Taxation, Technology and Regulatory Measures

According to experts, the budget of 2024 must bring changes in taxation, technology and regulatory measures. The budget must provide tax benefits on the life insurance products. This offers tax relaxation for premiums, especially for term plans. The deduction in the GST rates on the premium may ensure the affordability and accessibility of insurance products to the public at large. In addition, the experts wish to eliminate the taxation on annuity plans. There should also be a minimum capital requirement for the new insurer to enter the market with insurance agents. The budget of 2024 should also offer Insurtech support to avoid cyber threats.

GST Rate

Some experts believe that the IRDAI must reconsider the GST rates on health insurance policies. The IRDAI may achieve its vision of ‘Insurance for All by 2047’ if it reduces the GST rate on health insurance policies. A buyer currently pays the GST at the rate of 18%. The government should reconsider the rate in the upcoming budget session.

Source – Business Today

Demand for Insurance Policy in 2024

The life insurance business may have a growth record of 6.7 per cent in 2024 due to rising demand for insurance plans. A greater number of middle-class people show their interest in buying an insurance policy. The non-life insurance business is also likely to grow by 8.3 per cent due to many factors. This includes economic growth, government support, improvement in distribution channels etc. The IRDAI vision "Insurance for All by 2047" is likely to support the development and growth of the insurance industry.

Source – Business Standard

Performance of the Insurance Sector in 2023

The insurance sector performed well in 2023. It brought progressive results which changed customer preferences and showed their trust in the insurance sector. The general and life cover policies noted a growth rate of 16 per cent and 18 per cent respectively. IRDAI took various steps to ensure the growth of the sector. This includes regulatory reforms and policy. The insurance industry also noted various factors which contributed to the growth rate. This includes the cashless claim in many health insurance policies. The insurance sector puts a great focus on women consumers by giving priority to women’s term insurance. The simplification of policy documents by insurance brokers and companies also contributed to the growth. This is likely to showcase the growth in penetration in the industry in 2024 as per the article shared by Business Outlook India.

Expectations from Budget 2024-25

The budget of 2024-25 can be a game changer in the insurance sector. The government should come up with new schemes. It should allow a full tax deduction for the premium of the life insurance policy. This will encourage the buyers to invest more in the insurance sector. Currently, a person may claim up to Rs. 1,50,000 as a tax deduction in the life insurance plan under section 80C. The deduction is applicable in the case of a person, children and spouse. The government should increase the tax deduction rate and increase it up to Rs 2,00,000 on the premium premiums. Life insurance is an important policy for middle-class people. Therefore, it is important to make these changes to increase insurance penetration. The government needs to provide tax benefits in life insurance policies.

Quick Link: Become an Insurance agent

Steps that the Government may Take in 2024

Here are some steps that the government should take in 2024 to ensure that considerable growth rate in the insurance sector.

  • The government should remove the tax on annuity plans. This shall help people with retirement benefits.
  • The insurance currently attracts an 18 per cent tax rate. At the same time, health insurance attracts a 5 per cent slab. The government needs to reconsider the rate as it is likely to create confusion among people about the policy they should buy. People may shift to health insurance policies due to the tax rate on life insurance.
  • The tax rate should be equal on every policy to make it more accessible and affordable for people.
  • The government should include the personal accident plan under Section 80D.

Source: (https://bfsi.economictimes.indiatimes.com/blog/indian-insurance-sectors-budget-2024-wishlist-for-growth-tax-reforms-and-digital-inclusion/107195835)

Conclusion

The market of the insurance sector is likely to note a big growth in 2024. The insurance agent may earn more commission by selling the insurance policy. The insurance agent may find many customers due to an increase in insurance demand. The companies are also looking to hire more insurance agents to meet the unique demand of people. The budget of 2024 will overall play a major role in the insurance agency. It shall give rise to the insurance agents and companies.

FAQs

Q. How to become an insurance agent?

A. One may easily become an insurance agent. The insurance company needs more insurance agents to meet the demands of the people.

Here are the steps that answer how to become an insurance agent.

  • A person must clear his 10th and 12th examinations.
  • He must attend the training session.
  • He must clear the exam.
  • He shall become the insurance agent once he clears the exam.
Q. Who can become an insurance agent?

A. Here are the people who may become an insurance agent.

  • Home-maker
  • Businessmen
  • College student
  • Retired employee
  • An 18-year-old person
Q. What are the benefits of becoming an agent?

A. Here are the benefits of becoming an agent.

  • Flexible timing
  • Be your own boss
  • Set your own target
  • Work from home
Q. What are the policies that an agent may sell?

A. An agent may sell the following policies.

  • Life cover policy
  • Health cover plan
  • Motor cover plan
Q. What is the difference between a PoSP and an insurance agent?

A. Both PoSP and insurance agents sell the policies. A PoSP may sell policies of many insurance companies. At the same time, an insurance agent may sell the policy of only one company.

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