Cashless Economy Brings Significant Insurance Premium Discounts

With the demonetization move, there is a huge paradigm shift from a cash economy to a cashless economy. With the initial implementation of things in a cashless economy, people were confused and were in a bit of worry and concern about how the cashless economy will function. Insurance Premium Discounts is a subject of digitalization

The mass population of India was confused in the sense that will the move towards a cashless economy will bring additional burdens in the form of extra charges or will offer convenience, ease, and tangible benefits?

The government offered varied incentives to provide a smooth path for the population to switch to digital transactions. The cashless economy offers the ease of transacting in this digital eco-system promoted off lately. The digital transactions will enable the individual to keep track of their spending and enable them to manage their income budgets appropriately.

Insurance Premium Discounts in a cashless economy

The government recently announced various discounts on digital transactions to create an ecosystem for the cashless economy. Such discounts were also offered on the insurance premium for making a digital premium payment for buying an insurance policy.

General Insurance: The general insurance comprises health, motor, travel, home insurance policies. The government offered a 10% discount on insurance premiums for the general insurance policies bought online via public insurance companies which are Oriental Insurance company, New India Assurance Company, United India Insurance Company, and National Insurance company.

However, the same kind of insurance premium discount is not offered for the online policies bought from private general insurance companies.

Life Insurance: The life insurance corporation of India (LIC) is the only state-owned life insurance company in India. To push and promote the cashless economy, the government offered an 8% discount on the life insurance policies bought online through LIC’s website.

Private life insurance companies and other insurance intermediaries, however, believed that if the government would have offered a similar kind of insurance premium discount on the insurance policies bought online, there would have been a big boost to the insurance sector and push towards the cashless economy.

Railways to offer Accidental Coverage to Passengers.

With the increasing emphasis on digitization in the country, the Indian government has put in place the provision of travel insurance which also includes accidental coverage of up to Rs 10 lakh on train travel. Through its suburban network, Indian Railways will offer a discount of 0.5% to customers who buy seasonal or monthly tickets and pay through digital ways. This step has been adopted by the government to promote digitization and an additional discount of 0.5% on ticketing by making online payments, in a way, as an incentive for the general public.

The Indian government had implemented this rule on January 1, 2017, according to the facts, more than 14 lakh people travel by Indian Railways every day and 50% of this figure buys tickets by paying online every day. Digitization will take the country to a different height and usually, the tickets purchased through internet banking will act as insurance for you. This also means that accidental coverage will be provided to over 10 lakh rail passengers every day under this scheme.

Public Sector Insurers to Provide Premium Discounts

According to the Indian government, all public sector insurance companies will have to provide a discount to the customer on the premium paid for insurance coverage, and the government has to implement this provision as soon as possible. The government has also laid down some rules for this, general insurance companies can offer a discount of up to 10% on the premium, while life insurance corporations on the premium payable for new insurance policies sold online may offer a discount of 8%., subject to digital payment.

All transactions under this rule shall be carried out under the supervision of a Central Government Department and a Central Public Sector Unit. The work of this unit will be to see that MDR charges or charges are not borne by the customer on the payment made by him. The work of this unit will be to see that MDR charges or charges are not borne by the customer on the payment made by him. Digitization will make all our work easier with increasing time, discount on premium payment means the introduction of online payments and in this manner will promote online payments.

Other Discounts to promote Cashless Economy

Some other discounts offered by the government to promote a cashless economy are the elimination of the service tax for digital transactions up to Rs 2,000. On purchase of fuel through digital transactions or mobile wallets, the individual gets a 0.75% discount. 0.5% discount on monthly and seasonal suburban railway tickets from 1 January 2017. 10% discount on NH toll payment via RFID or fast-tags in 2016-17.

Though for a country like India, it will take time for people to swap from the cash economy to a cashless economy. With the kind of freebies and other incentives offered by the government, the cashless economy is expected to grow but not at a rapid speed rather at a sluggish stage initially.

Government’s take on this

After seeing these offers of the government, it is decided that the government is positive about digitization and they are ready to make a digital India. Internet is the basic need of people and with the help of the internet, you can do everything whatever your need is.