Bhopal: GST will make buying life insurance cover costlier, said Mukesh Gupta, Zonal Manager (Central region) of the Life Insurance Corporation of India.
Addressing a press conference here on Friday, on the occasion of LIC completing 61 years of existence, Gupta said that the LIC is requesting the GST Council to decrease the tax rate on life insurance policies from 18 per cent to the original 15 per cent. He said that the buyers of insurance policies should also petition the government in this regard.
He said that only 10 per cent of the population of MP and Chhattisgarh – the two states which constitute the Central Region – have taken life insurance. “Obviously, the penetration is low”, he said.
He said that generating awareness may help increase the penetration. “The mindset that life insurance is one of tax saving options needs to be changed. Insurance Regulatory and Development Authority is also helping create awareness, especially in the rural areas.
Gupta said that after liberalisation, LIC is at the forefront in providing life insurance. LIC started with an initial capital of Rs 5 crore and today its total assets amount to Rs 25 lakh crore and a life fund of Rs 23 lakh crore. The LIC has 4897 offices, 1.15 lakh employees, 11.31 lakhs agents and 29 crore-plus policies.
According to data, LIC collected around Rs 124396.27 crore as premia in the last fiscal, which comes to around Rs 340 crore. Its market share is 71.07 per cent in terms of premia and 76.09 per cent in terms of number of policies.
During 2016-2017, LIC settled 215.58 lakh claims of around Rs 1.12 lakh crore. In FY 2017, LIC had the best settlement ratio with 98.34 per cent maturity claims and 99.63 percent death claims settled.
