At midnight on July 1, 2017, after years of deliberation, The Goods, and Services Tax (GST) was finally launched, bringing about a monumental change in Indian taxation system and life as we’d been accustomed to.
GST is aimed at simplifying the taxation process by replacing a number of different duties and taxes like services tax, central excise duty, surcharges and octroi by one single fee. Some hated the move; they still do, while others hailed it as a reform long overdue. Was it a misstep or a leap in the right direction? The jury’s still out. Is it beneficial to your well-being? How’s it going to impact your Mediclaim policy in the New Year? Five months after its implementation, there’s still plenty of questions and confusion about GST. Here, we answer the most compelling of them.
GST is aimed at simplifying the taxation process by replacing a number of different duties and taxes like services tax, central excise duty, surcharges and octroi by one single fee. Some hated the move; they still do, while others hailed it as a reform long overdue. Was it a misstep or a leap in the right direction? The jury’s still out. Is it beneficial to your well-being? How’s it going to impact your Mediclaim policy in the New Year? Five months after its implementation, there’s still plenty of questions and confusion about GST. Here, we answer the most compelling of them.
What’s the direct effect of GST on Mediclaim Policies?
Goods and Services Tax embodies the principle of ‘one nation, one tax.’ Its impact is all-encompassing. Before GST, both individuals, as well as family Mediclaim policies, were charging 15 percent service tax on the premium amount. But with GST coming into effect, the tax has been revised to 18 percent, a 3 percent increase that’s made Mediclaim policies costlier than before.
The increased prices apply to both existing policyholders as well as new buyers.
The increased prices apply to both existing policyholders as well as new buyers.
Can GST benefit Mediclaim policyholders in 2018?
There’s a very real chance of GST turning out to be profitable to the consumers in the Mediclaim sector. But that depends on how the government approaches the initial transitional phase. Most experts expect the government to take it slow for at least the first half of 2018, allowing the industry to ease into the new setup. This will increase the likelihood of the insurance companies getting a get-go on the input tax credit benefit and favor the policyholders as well as prospective customers.
Competition between insurance companies is another major factor that can work to the consumers’ advantage. Increased insurance premiums can cause the insurance companies to launch better, more lucrative insurance policies to beat the competition which would be a big win for the consumers.
Does GST pose any serious threats to Insurance market?
GST, in essence, was a fantastic idea that was perhaps implemented a little too soon, with a bit of less preparation than would have sufficed. The ensuing confusion is a big cause for concern. On the one hand, the increased prices and changed taxes can cause new customers to hesitate or even refrain from buying Mediclaim policies. The insurance providers, on the other hand, need to deal with additional expenses in the act of conforming to the new tax structure. This can cause a significant drop in sales and affect the solvency of the insurance sector.
What makes Mediclaim so essential in the modern day?
Mediclaim policies have been amongst the most sought insurance services in India over the past few years. With private medical treatment getting costlier than ever and government-run medical facilities falling woefully short of being adequate, more people are waking up to the importance of a good Mediclaim policy. Sure, a National Insurance Mediclaim Policy will be somewhat taxing on your budget, but it’ll also save you from bankruptcy should you require hospitalization due to an accident or illness! The common man is turning into a thinker and a planner. When it’s about health, it’s best to be well prepared for the worst. So, if you still don’t have a Mediclaim policy, it’s high time you invest in one.
Why choose Mediclaim over Health Insurance?
Mediclaim is a hospitalization benefit that, depending on the type of policy, offers either cashless treatment or reimburses the actual medical expenses you would pay for in case of surgery, accident or illness that necessitates being admitted in a hospital. A health insurance plan, on the other hand, provides you with a lump-sum if you are diagnosed with a pre-specified medical condition or disease. And while a health insurance policy only covers a short list of diseases like kidney failure, heart attack, and paralysis, a Mediclaim policy offers cover for a broader range of critical conditions, as well as accidents.
What should you look for in a Mediclaim policy in GST era?
A lot has changed with GST, but the main points of consideration for choosing a Mediclaim policy remain much the same. Be mindful of what you’re looking for from your Mediclaim policy. Take time to study and compare various Mediclaim policies in the market, identify the overall benefits as well as disadvantages each presents and pay close attention to policy coverage, term and the factors included as well as excluded. Remember, the premium should never be the sole deciding factor when you choose a Mediclaim policy. Look for a plan that covers your requirements and liabilities in addition to being a good fit for your budget.
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