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Impact of GST on Life Insurance Sector
Need for GST
The liability of indirect taxes is transferable, unlike direct taxation where there is no transfer of liability. For example, when a shopkeeper levies VAT, it is transferred to the buyer and this increases the cost of the product which the customer has to bear. After GST is implemented, this cascading effect of multiple taxes will be eliminated. GST’s implementation will also make it easier to compute the taxes to be paid and it will streamline the whole process of taxation.
Impact of GST on life insurance
Policyholders currently pay 15% service tax on the premium amounts. Due to the impact of GST, the premium is likely to increase as there is a higher tax rate of 18%.
However, you must keep in mind that safeguarding your life and the lives of your family members is of utmost importance. This is especially true, if you are the only breadwinner in the family, then securing the financial future of your family with life insurance becomes crucial. Therefore, it is imperative that you secure your loved ones irrespective of the effects of GST on life insurance premium.
Life is uncertain and you would not want your family to undergo financial distress in case of a tragedy. Therefore, it is recommended that you avail of life coverage for the security and well being of your loved ones.
The security of loved ones in case of an adverse event plays an important role in making the right decision. Therefore, it is recommended to compare various policies offered by different insurers to make the right choice.
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Francis Rodrigues
Francis Rodrigues has a decade long experience in the insurance sector, and as SVP, E-Commerce and Digital Marketing, HDFC Life, manages the online sales channel, as well as digital and performance marketing. He has had hands-on experience in setting up sales channels and functional teams from scratch over a career spanning 2 decades.
Written By:
Vishal Subharwal
Vishal Subharwal heads the Strategy, Marketing, E-Commerce, Digital Business & Sustainability initiatives at HDFC Life. He is responsible for crafting and ensuring successful implementation of the overall organisation strategy.
Reviewed By:
HDFC Life
Reviewed by Life Insurance Experts
HDFC LIFE IS A TRUSTED LIFE INSURANCE PARTNER
We at HDFC Life are committed to offer innovative products and services that enable individuals live a ‘Life of Pride’. For over two decades we have been providing life insurance solutions - protection, pension, savings, investment, annuity and health.
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