Although I am no expert, but looks like there were expectations from budget by Insurance firms (have been since few years). However, there was unexpected bouncer instead in terms of fillip for New tax regime & added tax on high value traditional insurance policies. Sentiments did get damaged and market punished the stocks very well. Also, I noted that insurance stocks had been rather steady last few months compared to some other sectors, so broken down really well.
Good question. Honestly, until today, I was not aware that any insurance policy has earnings non-taxable also. If anyone aware which are such policies and under which section these are tax exempt? I was only aware some ULIPs are tax exempt under 80C and that too not the earnings from them but the sum we invest in them per year (Pls correct me if wrong).
Excellent question. And I think this is more important to me personally. Its a long journey for people to mature and look at insurance as insurance. Pandemic provided some catalyst and I think this new regime push can provide another (I may be wrong). But now, insurance firms will be forced to sell insurance sans tax benefit pitch. In long run, this maybe welcome for society. (Again I can be wrong).
That’s an excellent Bingo statement again. However, when coming to stocks & valuations, we may have to bear some pain till things clear out. How long will it take, I don’t know.
Disc: Invested (around 8-10% of portfolio in Life Insurance firms) hence biased & critical. Not a buy/sell recommendation. I can be completely wrong in all my assessments
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