As Union Budget 2026 approaches, the , wider insurance coverage and stronger retirement security.
Experts say the Budget’s direction on life, health and MSME-linked insurance will be important. Hanut Mehta, CEO and Co-Founder of BimaPay Finsure, believes Budget 2026 could mark a turning point for insurance premium financing. “Union Budget 2026 is likely to be an inflection point for the insurance premium financing segment, not because of any single headline announcement, but due to the direction it sets for household credit and insurance penetration,” he says.
According to Mehta, wider insurance coverage would naturally increase the size and frequency of premium payments, making structured premium financing more relevant for households and small businesses.
The industry is also keen on smoother credit and lending frameworks. “Any move towards better data-sharing, simplified KYC or clearer digital lending norms reduces friction for lenders financing insurance premiums,” Mehta says.
He adds that faster approvals and lower costs could help first-time policyholders and small business owners access insurance more easily.
Tax treatment of insurance premiums is another area to watch. “If deductions or incentives around insurance premiums are expanded or made easier to claim, demand for higher-value policies is likely to rise,” Mehta says.
He explains that premium financing can help customers avoid liquidity stress while opting for meaningful coverage.
Simply put, the sector hopes Budget 2026 will support responsible lending and cash-flow-based credit assessment. “The Budget has the potential to move insurance premium financing from a convenience product to an integral part of India’s insurance and credit ecosystem,” Mehta says.