The standard of living of today’s population has increased in leaps and bounds. This has also led to an increase in expenses. Investing in basic luxuries, such as a car, does not come cheap. Therefore, it becomes disheartening when unforeseen circumstances like accidents, provide a hindrance. Insurance is the perfect solution in such situations. There are various forms of insurance for the different problems at hand, and the Indian population is slowly awakening to its benefits. The new Union Budget of 2014-2015, understands this. It has made reforms that benefit the insurance sector and therefore the public.
India’s new government came into power in May 2014. They made multiple changes with regard to the existing laws. One of the latest changes was proposed by our new finance minister, Arun Jaitley. In the latest Union Budget, he is attempting to increase the Foreign Direct Investment (FDI) limit from 26% to 49%. This increase brings about relief in the insurance sector in particular. It allows for greater capital flow, and therefore also enables its spread into the rural areas.
With the deduction in home loan interest rates, more people are able to afford a house. However, ownership does not come without responsibility. Property too is susceptible to loss or damage. Therefore, a house insurance policy becomes the ideal go-to in such situations. It would aid in covering a majority of the expenses at the time of damage, without leading to financial distress. Another necessity in today’s time is a vehicle. A motor insurance policy has been made mandatory. Bumps and scratches are an everyday experience. Without insurance, car maintenance alone would prove too expensive.
Apart from these basic needs, travelling is a growing trend among many. With the fast-paced life of today we always require a break, and travelling is the perfect solution. But what about when all our hard earned money is lost? Cancellation of flights due to storms, and loss of baggage is unfortunately not unheard of. In such events travel insurance comes in handy. It allows for a safety net in the event of an unwelcome surprise.
Another very important insurance is health insurance. Good health, today, has become a necessity. Medical and hospital bills usually run high, and it is important to have this cover in case of any unexpected illnesses. Oftentimes the lack of money may keep one from being treated for an illness. It is therefore important, for the sake of one’s wellbeing, to be aware of such potential expenses and be covered for the same.
The increase in FDI to 49% leads to a greater fraction of the population being able to avail of the benefits of insurance. It would also lead to the use of international insurance products and improved customer service. The Union Budget also declares life insurance policies as exempt from taxes. It therefore makes it more affordable, encouraging more people to opt for it. This emphasis on insurance policies not only allows more of the population to have a safety net, but also leads to a high amount of growth in the industry. It causes an economic and financial boost for the country.