Non-life insurers’ penetration as a percentage of GDP is less than 1%, though it has increased slightly over the last 2 years. Sector players say the government should come up with some tax reforms in this Union Budget to benefit the policyholders, so as to improve the insurance penetration. 
 
As of now individuals below 60 years are eligible to claim up to Rs 25,000 as deduction for health insurance whereas above 60 can claim up to Rs 30,000. An increase in this limit would be highly useful, said Varun Dua, founder and CEO of ACKO General Insurance. 
 
GST has made health insurance more expensive. With 18% tax rate on health insurance, access to quality health care has become harder for people.
 
In India only 27% people or approximately 35 crore have health cover, according to a recent data released from the National Health Profile (NHP). Nearly 100 crore Indians do not have any cover against serious diseases.
 
Hence, it is imperative to have universal health care scheme to give the people an easy access to standard treatment, Dua said. 
 
"The framework for pricing offered by health care service providers also needs to be streamlined to make healthcare services available for all. It is mostly the financially weak who are worst hit at times of emergencies. A discipline in the pricing would ease the burden of crores of Indians," Dua added.
 
Chennai-based United India Insurance Company (UIC), a 100% government-owned company, Chairman and Managing Director M N Sarma in a recent interview to Zee Business said GST rate on insurance sector is 18%, which is unfavourable for insurance sector and it should be reduced to 10-12%. 
 
Lower GST rates would be helpful for the public. Deduction in Section 80D should be increased from Rs 25,000 limits. As the insurance premiums have gone up and taxable income has also increased so deduction limit too should increase, Sarma added.