There are a few things that the health insurance industry wants from Budget 2012-13.
Firstly, the limit on Foreign Direct Investment (FDI) should be raised. The insurance business has a capital intensive nature and therefore, raising the cap on FDI to at least 49% will provide an incentive to foreign companies to invest in the Joint Venture (JV) company.
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Secondly, there should be separate limits for health insurance and life insurance premiums. This is needed because there is a pressing urgency of a separate limit of INR 1 lakh for life and health insurance premiums. This would help improve insurance density (1 USD = 55.7 INR; 1 USD = 158.4 Yuan) which continues to be low in newly evolving markets.
Thirdly, health insurance and term insurance products should be exempted from service tax. In virtual absence of a government-backed social security and rising health care costs, there is a need to provide incentive to build a safety net. Exemption of service tax on term products for life and health insurance premiums up to INR 10,000 can help achieve the same.
Fourthly, it is necessary to free preventive checkups of service tax. Emerging lifestyle diseases are posing a fresh challenge and preventive checks can help with timely intervention and prevention.
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