Insurers Propose Enhanced Tax Benefits and Parity for Insurance Products in Budget 2026

Insurance industry leaders are urging the government to enhance tax benefits in the upcoming Budget to boost insurance penetration and retirement preparedness. They seek higher income tax exemption limits on life and health insurance premiums, alignment of tax treatment for annuities with other pension products, and an increase in the tax-free maturity limit for Unit Linked Insurance Plans (ULIPs) to ₹5 lakh. These measures aim to simplify the tax framework, encourage long-term savings, and make insurance more affordable following recent GST exemptions.