In a move towards widening the social security net, the government has taken its financial inclusion drive a step further by announcing a new health insurance scheme under which each economically weak household will get a health cover of Rs1 lakh.

Besides this, senior citizens will get additional top-up cover of Rs 30,000, Finance Minister Jaitley said in his Budget speech.

Sandeep Patel, MD & CEO, Cigna TTK Health Insurance, said the proposal for additional health cover for senior citizens will help reduce the burden of healthcare expenditure for the aged.

Most of these schemes require the beneficiary to pay a small amount as premium or contribution, while the rest is paid by the Centre and state government.

Industry experts say that the new health scheme will supersede the earlier Rashtriya Swasthya Bima Yojana scheme which provided coverage of Rs 30,000 for the economically weak.

Bhargav Dasgupta, MD and CEO of ICICI Lombard General Insurance, said enhanced coverage is positive as it was widely felt that the earlier coverage of Rs 30,000 was inadequate. He said industry was waiting for the finer details of the scheme.

Krishnamoorthy Rao, MD & CEO of Future Generali Insurance, said as a consequence of the enhanced coverage the number of ailments/ procedures where the complete cost of treatments could be covered would increase. This would also increase the number of quality hospitals within the network of this scheme, with a larger number of hospitals getting empanelled.

Further, there was attention paid to the retirement financing gap with the measure to encourage annuities by reducing service tax on single premium annuity insurance policies, added Jonathan Anchen, Head of Economic Research & Consulting, India, Swiss Re.

Anuj Agarwal, MD and CEO, Bajaj Allianz Life Insurance said, "The proposal to reduce service tax on single premium annuity plans from 3.5 per cent to 1.4 per cent is a welcome step. Tax exemption for 40 per cent corpus in NPS schemes and other superannuation funds, for contributions made on or from April 1, 2016, will help in boosting old-age income security and promote people to buy annuity plans."

Anil Lobo, India Business Leader for Retirement, Mercer India, said the step for making 40 per cent of withdrawal from National Pension Scheme tax-free will ensure tax uniformity and make the scheme more attractive among its subscribers.

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