Cashless Economy Brings Significant Insurance Premium Discounts

Cashless Economy Brings Insurance Premium Discounts

In addition to discounts on diesel and petrol and exemption on service tax applicable on the payment up to Rs. 2,000, a discount of 8 to 10% is applicable to the premium paid for insurance coverage, which however are parts of the package pronounced by the government of India in favor of the promotion of digital transactions. Modi Government certainly wants us Indians to stop or minimize using cash for our day-to-day transactions.

Railways to offer Accidental Coverage to Passengers

Another key measure takes account of price cuts that are applicable to suburban train tickets inclusive of accidental coverage of up to Rs. 10 Lakhs on train travel. Through its suburban network, Indian Railways shall additionally provide an incentive in terms of a discount of 0.5% to customers who purchase seasonal or monthly tickets and pay via digital means w.e.f. January 1, 2017.

Roughly 14 Lakhs people purchase railways tickets every day and more than 50% of the tickets are purchased online and payments are made digitally, typically via Internet Banking. This also means that above 10 Lakhs of Railways passengers will be provided with accidental coverage every single day under this very scheme.

Public Sector Insurers to Provide Premium Discounts

All public sector insurers shall also offer discounts on the premiums paid for insurance coverage. General Insurance Companies to offer up to 10% discount on the premium while Life Insurance Corporation to offer 8% discount on the premium payable for new insurance policies sold online subject to the payments made digitally. All such transactions will be made under the supervision of Central Government Department and Central Public Sector Unit. Both of these government units will also ensure that they only bear the MDR charges or Fee applicable to every such transaction and not the customers. The central government has advised the same to state governments and their organizations across the country.

What Government Says?

Finance Minister of India, Arun Jaitley announced that 0.5% discount will be applicable to Train Tickets purchased online w.e.f. January 1, starting from Mumbai Suburban Railways. Customers who will pay via any of the digital means, such as a Debit Card, Credit Card, Internet Banking, or an e-Wallet, will get an accidental insurance of Rs. 10 Lakhs. The government, in total, announced 11 incentives to encourage the use of digital means for payments, which is another smart move by the government after it legally banned old currency notes of Rs. 500 and Rs. 1000 in a bid to scrap the money earned illegally and never disclosed.