Hike premium limit to Rs 10 lakh to make payouts from life insurance taxable in Budget 2024: Sumit Rai of Edelweiss Tokio
Innovation in traditional plans could see hyper personalisation in the near future, leading to open-ended products with the ability to mix and match, Sumit Rai, MD & CEO, Edelweiss Tokio Life Insurance tells Riju Mehta.
What are your Budget expectations?
A lot of expectations continue to be what they were. The annuity double taxation is a big one because India is one of the largest grey countries and a part of the reason annuities are not doing as well is the taxation structure. You are taxing it at entry and exit.
Another thing that the industry has been asking for a while is to let go of GST on insurance. Thirdly, if the Rs.5 lakh cap can be increased to, say, Rs.10 lakh, it would help.
How has the Rs.5 lakh cap on premiums impacted the sale of traditional plans?
After the initial lull in April-June, these are broadly back on track. I don’t see an impact.
If you look at the industry ticket sizes, they are pretty much where they were last year, and the sales are still growing. The Rs.5 lakh ticket sizes, in terms of the number of proposals, may have marginally declined, but even those are coming back on track.
What is the growth of traditional plans compared to term plans and Ulips?
The segment that is growing the fastest is the traditional plans, especially the non-par guaranteed policies, which are leading the industry. If the industry, on an average, is growing at, say, 14-15%, the non-par segment alone is at about 17-18%.
Term has declined, and is probably 5.5% of the total sales, as it has become more expensive after Covid. With term, there is a bit of a challenge and friction at this point of time, but it will ease as experience improves. Ulips are also doing well, but a lot of the mid-size ticket which was
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