What is the story about?
As the Union Budget 2026 approaches, experts across health, life, and general insurance are calling for targeted fiscal and structural reforms to improve affordability, expand penetration, and strengthen India’s insurance ecosystem in line with the vision of Insurance for All by 2047.
Medical inflation remains a central concern for the health insurance segment.
Srikanth Kandikonda, Chief Financial Officer, ManipalCigna Health Insurance, said medical inflation in India is projected at 11.5%–14%, among the highest in Asia, placing sustained pressure on household finances. He said measures such as the removal of GST on insurance premiums and allowing 100% FDI have helped affordability, but rising healthcare costs continue to challenge coverage adequacy.
Kandikonda said higher public health spending, stronger primary care networks, and a sharper focus on prevention could reduce long-term treatment costs and ease financial stress. He also called for enhanced tax benefits for OPD services and preventive health screenings beyond existing Section 80D limits.
From a broader macro and fiscal perspective, Ajit Banerjee, President and Chief Investment Officer, Shriram Life Insurance Company, said the government is likely to continue balancing fiscal prudence with growth priorities. He said while central government capex may face limits, higher allocations could be seen for defence, railways, shipbuilding, alternate energy, education, and coordinated health initiatives under the National Health Mission.
Banerjee also stressed the need to raise insurance tax deductions, either by increasing Section 80C limits or creating a separate section for insurance premiums, to improve penetration.
Highlighting structural tax issues within the insurance value chain, Narendra Bharindwal, President, Insurance Brokers Association of India (IBAI), said while GST exemption on retail health and life insurance has improved affordability, insurers cannot claim input tax credit on exempt products.
He said GST paid on distribution, servicing, and technology costs gets embedded into premiums, limiting investment in deeper penetration and digital infrastructure. Bharindwal suggested allowing input tax credit or a calibrated offset mechanism, along with stronger public–private partnerships for health, MSME, climate, and catastrophe risks.
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Calling for the next phase of reform beyond GST exemption, Rajendra Upadhyaya, Chief Growth Officer, Choice Insurance Broking, said Section 80D limits no longer reflect the reality of double-digit medical inflation.
He said a ₹10 lakh family health cover often exceeds current deduction limits and urged the government to revise Section 80D to ₹50,000 for individuals and ₹1 lakh for senior citizens to bridge the protection gap.
Supporting this view, Shikha Bhatia, Associate Professor, Finance and Accounting, IMI Delhi, said deductions under Section 80D should be revised upward to ₹40,000 for individuals and ₹80,000 for senior citizens to better align with rising healthcare costs.
From a consumer and prevention-focused lens, Ankita Srivastava, General Manager – Growth and Strategy, The Healthy Indian Project (THIP), said GST exemption has increased awareness about insurance, but deeper reforms are now required. She said tax incentives for risk protection, support for micro-insurance, distribution reforms, faster grievance redressal, and clarity on composite licensing are critical to sustaining momentum and strengthening consumer protection.
In the life insurance segment, Alok Rungta, Managing Director and CEO, Generali Central Life Insurance, said limits on tax concessions for life insurance and retirement products need to be revisited to reflect rising incomes and evolving life-stage needs. He said simplifying taxation, encouraging pure protection plans, and incentivising long-term savings could improve affordability and participation, while policy continuity would allow insurers to plan responsibly.
Focusing on digital infrastructure and awareness, Sharad Mathur, Managing Director and CEO, Universal Sompo General Insurance, said achieving Insurance for All by 2047 requires a time-bound roadmap supported by shared digital insurance infrastructure and cost-efficient distribution frameworks. He said sustained funding for insurance literacy, particularly in rural and low-income regions, and greater private sector participation in government schemes could narrow protection gaps.
The insurance premium financing segment is also watching the Budget closely. Hanut Mehta, CEO and Co-Founder, BimaPay Finsure, said Budget 2026 could be an inflection point if policy signals support deeper insurance coverage, improved credit access, and clearer digital lending norms. He said better data-sharing, simplified KYC, and tax clarity could make premium financing a mainstream product, enabling customers to opt for adequate coverage without liquidity stress.
Looking ahead to the next phase of reform, Prantik Mitra, Director – Client Advisory Group, Alliance Insurance Brokers, said Budget 2026 should build on the structural changes of 2025, including 100% FDI and GST exemptions. He said higher and clearly defined tax incentives for pure protection products, especially term life, and progress on composite licensing could improve efficiency, reduce costs, and encourage first-time buyers to prioritise risk cover over savings-linked products.
From a general insurance standpoint, Subrata Mondal, Managing Director and CEO, IFFCO-TOKIO General Insurance Company, said recent GST rationalisation on health insurance has provided relief to policyholders and could improve penetration. He said there remains a strong case for doubling Section 80D deduction limits to reflect medical inflation. Mondal also called for higher allocations to crop and climate risk insurance, expanded coverage under PMFBY, and the creation of disaster and catastrophe insurance pools to improve resilience amid increasing climate volatility.
Highlighting middle-class protection needs, Vaibhav Kathju, Founder and CEO, Inka Insurance, said the Budget presents an opportunity to deepen insurance adoption by increasing tax incentives for health and term insurance and encouraging early coverage. He said creating dedicated tax sections for pure protection products, along with support for digital-first distribution and financial literacy, could help India transition from being under-insured to well-protected.
ALSO READ | Budget expectations: Hospitality industry calls for infrastructure status, tax rationalisation
Medical inflation remains a central concern for the health insurance segment.
Srikanth Kandikonda, Chief Financial Officer, ManipalCigna Health Insurance, said medical inflation in India is projected at 11.5%–14%, among the highest in Asia, placing sustained pressure on household finances. He said measures such as the removal of GST on insurance premiums and allowing 100% FDI have helped affordability, but rising healthcare costs continue to challenge coverage adequacy.
Kandikonda said higher public health spending, stronger primary care networks, and a sharper focus on prevention could reduce long-term treatment costs and ease financial stress. He also called for enhanced tax benefits for OPD services and preventive health screenings beyond existing Section 80D limits.
From a broader macro and fiscal perspective, Ajit Banerjee, President and Chief Investment Officer, Shriram Life Insurance Company, said the government is likely to continue balancing fiscal prudence with growth priorities. He said while central government capex may face limits, higher allocations could be seen for defence, railways, shipbuilding, alternate energy, education, and coordinated health initiatives under the National Health Mission.
Banerjee also stressed the need to raise insurance tax deductions, either by increasing Section 80C limits or creating a separate section for insurance premiums, to improve penetration.
Highlighting structural tax issues within the insurance value chain, Narendra Bharindwal, President, Insurance Brokers Association of India (IBAI), said while GST exemption on retail health and life insurance has improved affordability, insurers cannot claim input tax credit on exempt products.
He said GST paid on distribution, servicing, and technology costs gets embedded into premiums, limiting investment in deeper penetration and digital infrastructure. Bharindwal suggested allowing input tax credit or a calibrated offset mechanism, along with stronger public–private partnerships for health, MSME, climate, and catastrophe risks.
ALSO READ | CII asks govt to invest in railways and factories, cut fuel taxes, and put money back in people’s pockets
Calling for the next phase of reform beyond GST exemption, Rajendra Upadhyaya, Chief Growth Officer, Choice Insurance Broking, said Section 80D limits no longer reflect the reality of double-digit medical inflation.
He said a ₹10 lakh family health cover often exceeds current deduction limits and urged the government to revise Section 80D to ₹50,000 for individuals and ₹1 lakh for senior citizens to bridge the protection gap.
Supporting this view, Shikha Bhatia, Associate Professor, Finance and Accounting, IMI Delhi, said deductions under Section 80D should be revised upward to ₹40,000 for individuals and ₹80,000 for senior citizens to better align with rising healthcare costs.
From a consumer and prevention-focused lens, Ankita Srivastava, General Manager – Growth and Strategy, The Healthy Indian Project (THIP), said GST exemption has increased awareness about insurance, but deeper reforms are now required. She said tax incentives for risk protection, support for micro-insurance, distribution reforms, faster grievance redressal, and clarity on composite licensing are critical to sustaining momentum and strengthening consumer protection.
In the life insurance segment, Alok Rungta, Managing Director and CEO, Generali Central Life Insurance, said limits on tax concessions for life insurance and retirement products need to be revisited to reflect rising incomes and evolving life-stage needs. He said simplifying taxation, encouraging pure protection plans, and incentivising long-term savings could improve affordability and participation, while policy continuity would allow insurers to plan responsibly.
Focusing on digital infrastructure and awareness, Sharad Mathur, Managing Director and CEO, Universal Sompo General Insurance, said achieving Insurance for All by 2047 requires a time-bound roadmap supported by shared digital insurance infrastructure and cost-efficient distribution frameworks. He said sustained funding for insurance literacy, particularly in rural and low-income regions, and greater private sector participation in government schemes could narrow protection gaps.
The insurance premium financing segment is also watching the Budget closely. Hanut Mehta, CEO and Co-Founder, BimaPay Finsure, said Budget 2026 could be an inflection point if policy signals support deeper insurance coverage, improved credit access, and clearer digital lending norms. He said better data-sharing, simplified KYC, and tax clarity could make premium financing a mainstream product, enabling customers to opt for adequate coverage without liquidity stress.
Looking ahead to the next phase of reform, Prantik Mitra, Director – Client Advisory Group, Alliance Insurance Brokers, said Budget 2026 should build on the structural changes of 2025, including 100% FDI and GST exemptions. He said higher and clearly defined tax incentives for pure protection products, especially term life, and progress on composite licensing could improve efficiency, reduce costs, and encourage first-time buyers to prioritise risk cover over savings-linked products.
From a general insurance standpoint, Subrata Mondal, Managing Director and CEO, IFFCO-TOKIO General Insurance Company, said recent GST rationalisation on health insurance has provided relief to policyholders and could improve penetration. He said there remains a strong case for doubling Section 80D deduction limits to reflect medical inflation. Mondal also called for higher allocations to crop and climate risk insurance, expanded coverage under PMFBY, and the creation of disaster and catastrophe insurance pools to improve resilience amid increasing climate volatility.
Highlighting middle-class protection needs, Vaibhav Kathju, Founder and CEO, Inka Insurance, said the Budget presents an opportunity to deepen insurance adoption by increasing tax incentives for health and term insurance and encouraging early coverage. He said creating dedicated tax sections for pure protection products, along with support for digital-first distribution and financial literacy, could help India transition from being under-insured to well-protected.
ALSO READ | Budget expectations: Hospitality industry calls for infrastructure status, tax rationalisation
