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Budget 2022 expectations: Tax breaks for personal accident insurance, reduction in GST on premiums

Any tax benefits or breaks are likely to increase awareness and consumer willingness to purchase personal accident covers

December 06, 2021 / 10:24 AM IST
Representational image

Representational image

Personal accident insurance covers are not a priority for most policyholders. Though it is one of the vital insurance covers for most individuals, it is rarely purchased. If the Union Budget 2022 offers tax deduction for the premium paid to purchase personal accident insurance, then it can result in a change in the situation.

The uses of personal accident cover

Personal accident insurance pays a predetermined sum of money in case of death, permanent total disability, or partial disability caused to the insured person. The premium paid for Rs 10 lakh sum assured is around Rs 1000-Rs1200, depending on the variety of cover on offer.

Despite such a small premium charged, many do not purchase it. Many families suffer from financial losses caused by accidents induced deaths and disabilities. Nearly 3.74 lakh individuals died due to accidents in CY2020 as per the statistics released by the National Crime Records Bureau. Deaths of individuals between the age of 18 years and 45 years accounted for 55.9 percent of the total deaths during 2020, highlighting the need of personal accident insurance cover for individuals in productive age groups.