India’s insurance brokers are calling on the government to pair tax reforms with structural changes that would make coverage more accessible to low-income groups, according to a report by The New Indian Express.
The Insurance Brokers Association of India (IBAI) said the recent Goods and Services Tax (GST) exemption on individual health insurance premiums, which took effect on Sept. 22, is a welcome move but not a comprehensive solution. The removal of the previous 18% GST rate is expected to make premiums more affordable, yet many of the country’s poor and marginalized citizens remain uninsured.
To close this gap, IBAI has recommended linking basic insurance coverage to government-backed financial programs such as the Mudra Loan initiative and the Pradhan Mantri Awas Yojana (PMAY). The association suggested that about 1% of a borrower’s loan could automatically be directed toward an insurance premium that would protect against health, life, personal accident, business interruption, and property risks tied to the financed asset.
“It has to be a soft mandate to ensure insurance reaches them because they will not buy on their own. Once they experience the benefits firsthand, trust will be built in the system and voluntary participation will follow,” IBAI president Narendra Bharindwal said.
Bharindwal explained that individuals with limited means seldom purchase insurance voluntarily, even though they are often most affected by medical or financial emergencies. The association believes that incorporating coverage into existing financial transactions would help normalize insurance use among these communities.
IBAI also proposed that instead of direct subsidies, the government could recognize premium payments for vulnerable groups as eligible Corporate Social Responsibility (CSR) spending. This approach, the group said, would enable private companies to support insurance expansion while keeping government costs manageable.
Citing its internal estimates, IBAI reported that roughly 55 million Indians currently hold health insurance policies, leaving the majority of the population without any form of coverage.
The association expressed its readiness to work with the Ministry of Finance and the Insurance Regulatory and Development Authority of India (IRDAI) by providing research data and coordination support to promote wider access to affordable insurance, as reported by The New Indian Express.
