The life you live like a young individual has its consequences when you’re old and unable to fix the mistakes you have made. What are the measures that should be taken to maintain a healthy lifestyle?

A healthy lifestyle comes with the smart choices you make. Here are some of the tips that you should follow in-order to maintain a healthy lifestyle:

1. Avoid “White poison”

Sugar is known to be as the white poison that can effect like obesity, type 2 diabetes, heart diseases and many more problems.

The intake of sugar is a necessity whereas you need to monitor it precisely when you are aware of your body type and it’s reaction to it. In order to have a healthy lifestyle, try to avoid processed sugar. You can intake natural sugar in the form of fruits.

NOTE: There are some fruits if taken excessively can be harmful to your body as they may contain the same or more amount of sugar like sweet drinks.

2. Healthy Snacking

Replace your old snacks with the new ones. Try out some homemade snacks made with nuts and dates i.e. energy bars, granola bars etc. This kind of snacking helps boost your immune system when you’re low and crave for something like sweet, chocolate or something crispy. It will also help you in maintaining your weight and energy at the same time.

3. Coffee is your “Best Friend”

Coffee is high in antioxidants. Its adequate intake can also reduce the risk of diseases like type 2 diabetes, Alzheimer’s s and Parkinson’s etc.
Most people adopt black coffee in the morning or multiple times in a day for weight loss. Please always consider that this doesn’t work for all types of bodies. Everybody has different choices to pick and react, you just need to choose the right one.

4. Get a pill of “Health Insurance”

This has nothing to do with eating and working out. It is linked with the much-needed type of financial investment for the future. We invest our finances for expensive clothing, hair, skin but never plan for the situation where you can fall ill with no money in your pocket. Get yourself a health insurance policy from jubilee General Insurance will help you maintain your existing lifestyle even after you’re out of money.

5. Get Enough Sleep

Your sleeping pattern defines the foundation of your whole lifestyle. A poor sleeping pattern can cause insulin resistance, disrupt your appetite hormones and can reduce your physical and mental performance.

Poor sleep can also cause hunger packs during nights. This will lead you towards Obesity as the timing of your intake is wrong hence the food is not digested.

Proper sleep can energize you physically and mentally as well. Practice this and you’ll see a huge difference in your productivity.

6. Avoid Junk Food

In the world full of amazing, edibles it’s hard to avoid junk food. It is fine if you are having it once in a month. Having junk food on a daily basis can cause various number of health issues.

Try to build the ritual of cooking the same thing at home. The same burger you eat outside will react differently if it’s home-cooked due to its hygiene and the quality of the ingredients used in its preparation.

7. Focus on the timing of your Meal

You may have always heard about what type of meal you should eat but may never hear of the right time of having a meal.

Just by having your meal at the same time, each day is going to make a lot of difference in your health. If you practice this every day then your brain would start giving the signal to your digestive system to work accordingly. This tactic is also helpful if you are considering to shed some weight.

8. Hydrate, Hydrate and Hydrate

Our 60% body is made of water. Waterworks as life fuel for your body. It helps in lubrication of joints, regulation of body temperature, blood flow, digestion and even respiration.8 ounces of water is the minimum requirement of the body each day.

Our body releases salt on a daily basis. The sufficient intake of water is going to cleanse your body from inside.

9. Focus on your Deficiencies

High levels of deficiency among all age groups, genders, income levels, and locations. Amongst the selected citizens, 53.5% had vitamin D deficiency, 31.2% had insufficient vitamin D, and only 15.3% normal vitamin D.

NCBI

This may not occur as a serious problem today but once you’ll get older, there is no way back to the healthy and strong bones.

Start focusing on your deficiencies. Consult a nutritionist and get a proper guideline to combat your vitamin deficiencies in early age in order to maintain the desired lifestyle.

10. Avoid Bright Lights Before Sleep

Using screen before bedtime can cause pressure to your eyes. The LED light of the screen is harmful to the eyes. It will also cause headache and dark circles. That will make you look and feel weaker. The more you use the electronic devices before sleep, the harder it’ll become to sleep on time.

11. It matters “ How you cook”

The timing of how much your food takes to cook is also important for health concerns. Your food should not be over-cooked or under-cooked.In both of the cases, it is going to be harmful to your health.

Always search on the internet about the cooking duration of every food item.

12. Diversify your Taste

The diversification in taste is important in order to stay healthy. One should be open when it comes to the taste of food. Try to have different combinations of food. Vegetables, Chicken, Seafood or Fruits is going to impact altogether for good health.

If you are someone who sticks to only one kind of food then you’re going to face little difficulty while maintaining your lifestyle.

13. Cardio is the Key

Cardio work-out is a high-intensity workout that helps you to make your metabolism strong. The stretch on the cold and warm muscles during cardio is going to shape-up your body.

15 mins of intense cardio-workout can show a lot of progress.

14. Extra virgin oil

People who consume Extra Virgin oil have a low risk of dying due to a Heart attack. In modern cooking techniques, people are replacing their canola oil with Extra Virgin Oil.

This has been in practice for thousands of years but by the time it has received great attention from the people who are conscious of their health and lifestyle.

15. Don’t go on Diet

Always make sure that going on a diet is not a solution to your problem. Things that work immediately on your body doesn’t last for a longer period of time.Crash diet, protein diet is one of these types.

Some of the diets are actually healthy for certain people who are seeking to gain/lose weight i.e Keto diet but this is also not a solution if you’re not going to embrace it as a Lifestyle.

However, clean eating is one of the solutions that are not hard to embrace as a lifestyle.

16.Track your work Life

Some people relate the healthy lifestyle with eating habits and burning calories but one most important factor is how your working pattern is? By working pattern means how much your job is stressful? Are you always working on short deadlines? These are some of the factors that keeps your mind stressful and hence it will make you feel dizzy and low most of your day.

It will also affect your appetite. One time you’ll feel nothing and and the next moment you’ll feel super hungry and in that situation, you would like to eat anything and eventually OVER-EAT. Having an unbalanced work-life is also going to make you unhealthy.

17. Burn your calories DAILY!!!

It’s pretty simple to understand this concept. Each day we intend to have calories and sometimes we add a number of it in our body. To keep it in balance, try to burn it on a daily basis. So you don’t have to worry about your weight.

18.Involve yourself into Sports

Try to indulge yourself in some sports activity in which you can have fun while doing something different. At the same time, you can burn your calories and keep your heart-rate balanced.

Sports activity like swimming, running and squash helps you a lot with muscles activity and leg work.

19.Get yourself routine check-ups

In Pakistan, if someone encounters cough or flu, they choose to do home medication first which is totally wrong. With the increasing climate change,different types of bacteria has taken place that are affecting people’s health in harmful ways.

One should always consult a physician or a doctor if they encounter any of virals or infections If you have permanent disease i.e. blood pressure, diabetes or asthma then get yourself a check-up once in every 3 months.

This can help you to track down on your health before it gets worst.

20. Avoid Drugs, Smoking and Alcohol

Drug addictions, Smoking, Alcohol consumption is harmful to your health without any doubt. If you’re addicted to any of these things, try to consult a doctor and leave it gradually.

21. Peace of mind for a Healthy Lifestyle

Aforementioned peace of mind with work and here we are going to mention the peace of mind with Personal Life. It is very important to monitor your relationships. The attitude of your close ones is always going to affect your mood and hence your mind too.

Try to be a problem solver and solve each problem in the shortest period of time. Because the more you drag it, the more you are going to think about it which is un-healthy specifically when you’re having problems like blood pressure.

22. Maintain good posture

Maintain a proper posture while sitting is important for a healthy spin. The pain in spin is generally caused by the wrong posture. If you‘re sitting sit in a wrong posture every day then you’ll feel comfortable with that but you don’t know that this posture is actually harmful to your back.

Wrong posture while sleeping can also cause disturbance and you’ll feel dizzy once you’ll wake-up.

23. Meditation

Nothing can replace the power of meditation. You may adopt all the tactics to remain healthy but there is nothing like meditation. No matter how much you’re busy, just close your eyes, lay down and think about how this world works, the system and its beauty. All the good things you believe in and this will contribute so much in your health.

24. Make it Habitual

Everything mentioned above needs to be done with consistency in order to get results. If you leave anything halfway then you shall not get the end result. Consistency is the key to healthy lifestyle.

25. Start NOW!!! And Gradually Change it

There is no starting point to anything only finish line is the defining factor. Start with small, baby steps and slowly and gradually try to embrace things. Adjust a little accordingly and then stick to it. It will become habitual as mentioned above. That’s what you need just keep going!!!

Bottom Line

These are some of the tips that you can adopt in everyday life. You just need to be consistent enough to hold onto these things and any-other healthy tips in order to achieve the desired Lifestyle. Share more tips with us in the comment section.

Stay Healthy and Fit

Khurram Zahid

The post 25 Tips to Manage a Healthy Lifestyle appeared first on Smartchoice.pk.

This blog post is going to give an overview of Life Insurance in Pakistan.

What is Life Insurance?

Life Insurance is a contract between an individual (the buyer of the insurance policy) and the insurer (insurance company).In this agreement, the insurer is liable to pay the death benefit to the beneficiaries upon the death of the insured.

The purchasing of a life insurance policy is determined by the applicant himself. the selection of the policy is driven by the lifestyle of the insured’s dependents and how much the amount will be required to maintain the needs of his family.

Life insurance is classified into three types:

Whole Life Assurance

When the sum assured is to be paid on the happening of the certain event, i.e. death of the insured, and then it is called whole life assurance.

Term Life Assurance

On the maturity of the life insurance policy, the amount is paid in one shot to the policyholder.

Annuity:

When on the maturity of the policy the sum assured is paid in installment, usually monthly, it is called an annuity.

The best age to get life insurance

The ideal age for obtaining life insurance is technically right after birth. Life insurance is age-banded, which means that as each year passes, the policy becomes more expensive.

The best age to purchase life insurance is under 35, but few people in that age group are able to afford life insurance.

What is the cut off age to Get Term Life insurance?

While you have to be 18 years or older to take out a life insurance policy, you can take out this type of insurance for or on behalf of a child or minor. It is recommended to take out a life insurance policy no younger than 25 years but no later than 50 years. The sooner you take out life insurance, the greater the benefit will be.

However, if you are over the age of 60 years, you may not be able to get term life insurance as most providers have this age as a cut-off to provide benefit. This is largely due to the fact that the insurer runs a greater risk of having to pay out a full benefit in case of death before they are able to cover the cost of the payout from monthly payments or premiums.

What are the various modes of payment for premium?

Premiums can be paid by the policyholders to the insurer in multiple ways depending on the insurer you are getting a policy from eg: in yearly, half-yearly, quarterly or monthly instalments.

Key Difference between Health & Life Insurance

The following points explain the difference between health insurance and Life insurance:

Life insurance, as the name suggests, is an insurance plan that covers the risk of contingencies that can affect human life and pays out the sum assured to the nominee on the death of the insured, or to the insured on the expiry of the definite term. Conversely, an insurance product, taken out by an individual, to compensate for the cost of medical and surgical expenses, but only up to the amount covered, is called health insurance.

In life insurance, both survival and death benefits are provided to the policyholder. On the contrary, health insurance provides treatment and medical benefits, in case of illness or accident.

The premium for life insurance can either be paid in a lump sum or periodic intervals, usually quarterly. In contrast, the health insurance premium is paid in a lump sum for the whole term.

An assured amount is paid to the nominee on the demise of the insured or the insured on the maturity of the policy, in life insurance. However, in case of health insurance, no money is recovered, if the term of the policy is expired instead it is reimbursed in case of any health issue. Life insurance is usually taken for a long-term say 10 or 20 years. As against, health insurance is taken for one year.

Key Differences between Whole Life and Term Life Insurance

In Term Life insurance, the policyholder gets insured up to a particular period only. On the other hand, whole life insurance works throughout the life of the policyholder.

In Whole Life Insurance, there is no definite period specified, i.e. it is not known how long the contract will continue. Conversely, in Term Life Insurance the definite time is specified in the contract.

Types of Life Insurance Plan

1. Endowment Plan

This kind of insurance policy is considered to be as the solid one in terms of return. This is one of the reliable methods of saving in which the sum is guaranteed to the insured either at the specified time or at his death.

The benefit of this plan can also be increased by the completion of specific requirements. You can read about all the details here. This cover is known as supplementary cover.

2. Children Education Plan

This plan is going to help your child’s future. In order to make it grow and protect, this insurance policy is well suited for all the parents. It also offers Cash value. On the death of the insured, Assured sum or cash value whichever ever is higher is given to the beneficiaries.

Some of these policy’s receivable can also be used for marriage as well. furthermore, some companies provide education continuation plan too under this policy.

3. Marriage Plans

Its a dream of every parent to see their daughter getting married the way she has always dream off. This policy is going to help you to make your daughter’s dreams come true. You can receive the benefit while you save money under this policy. At the end of the decided term, the holder of the policy will get the sum.

Some companies provide add-ons under this policy.

4.Retirement Plan

Working whole life is not the option and Retirement is something that has to come to everyone. So why not plan your retirement smartly by getting a plan for it.

This plan is going to help you in certain cases i.e. accidental death, sudden death, injury permanent disability. This plan also provides the option of receiving the accumulated cash value and get yourself enrolled for pension plan of life.

How does it work for you?

There are three, major elements of Life Insurance:

1) Death Benefit

The benefit is the amount guaranteed by the insurance company to the beneficiaries identified by the insured upon his death (or completion of policy tenure). The insured will choose the desired death benefit amount based on the estimated cost to cover future needs of dependents.

2) Premium Payment

The cost of insurance (COI) is determined by the insurance company. The premium amount is exclusive of other fee charges. Premium is influenced by the number of factors i.e. age, medical history, occupational hazards and risk propensity. The insurer is obliged to pay premium till the time he expires.

3) Cash Value

Cash value acts as two pointers:

1. A saving account can be attained by the policyholder with cash accumulated on a tax-deferred basis during his life. Some policies have restrictions depending upon the money withdrawn.
2. The second purpose of cash value is to offset the rising coast or to provide insurance as the insured ages.

Why Life Insurance is necessary?

There is nothing like imaging yourself on a death bed and helpless. The worst scenario you can imagine after this is “Your dependents being left with nothing to survive for the rest of their lives” To make sure this doesn’t happen, Life insurance is important for every individual.

This decision of purchasing an insurance policy is going to come handy once you’ll be old or in-case of retirement, it is going to pay-off the huge numbers that you’ll be unable to pay from current cash-flow. Life-saving and the death benefit is one aspect of insurance policy however you’re also going to get money once the tenure of the policy is at its completion.

1. Life Insurance for Children

In the case of Hereditary Risk, Parents can buy a Life insurance policy for their child. In the thought of expecting a long life for their child, parents will go to every limit to make their future secure. The best way is to buy an insurance policy under their name so they can use it when they will need it for their families.

2. Life Insurance for Parents

Life insurance can also be important in terms of investment. You can do this by getting a life insurance policy for your parents. Suppose that the premium of this life insurance policy is going out from your pocket and by making yourself the beneficiary of this policy, you’re going to save is the amount for the longer period of time. This option is considerable when your parents are young in age.

3.Life Insurance for Business Persons

Life insurance policy is also important for business persons. You’re running a business of your own or in partnership and most of the people relies on you. It’s necessary for you to buy a personal Life Insurance policy for the purpose of your business obligation.

4.Starting off with a “Family”

Life Insurance policy can be purchased when you’ve decided to start off a family. In this time, the rates would be comparatively cheaper than the time you get older. Better consider buying it now!!!

5. Marriage

One of the best offers the Life insurance policy comes up with is Marriage plan. In Pakistan, one of the most important things to worry about is ” how we are going to bear the expenses for our child’s marriage” this scenario is mostly applicable to girls. Buying a marriage plan under life insurance is the best thing you can gift to your child and peace of mind for yourself as well.

6. Child’s Education

Education plan under the life insurance policy is also one of the reasons why you should start making up your mind towards this financial product. This plan is going to take care of the finances of your child’s education on which the whole development of your child’s career and life is dependent upon. In Pakistan people usually don’t plan upon the finances that are going to come in their ways as the child grows up. Today he is in school and in the next 10 years, he is in high school and just like that he is standing in front of you and wants to go for a certification which is not pocket-friendly. This plan is going to help you then.

When does a policy lapse? How it can be revived?

It can be paid within a certain period specified by the insurer, from the date of first unpaid premium. It can be revived by paying the premium within the set time period.

Companies that provide Life Insurance in Pakistan.

These are the basic points towards the importance of insurance in an individual’s life. The most important thing you should keep in mind while buying an insurance policy is to get it compared. With so much competition online, it is pretty hard to get your eyes on the right options. Smart Choice is here to make your life easier. Simply log on to www.smartchoic.pk and get your plans compared. For further assistance please feel free to talk to our representative available at your service.

Khurram Zahid

The post Life Insurance in Pakistan: A Fundamental Guide appeared first on Smartchoice.pk.

Dr Salman Zubair mentioned that Pakistan ranked first in Asia and 48th in the world for most deaths caused by traffic accidents. Referring to the World Health Organization (WHO) 2015 Report, he said that nearly 1.2 million people die each year and 20-50 million people suffer non-fatal injuries due to road crashes.

Express Tribune-22 Feb 2019

another one!!!

Around 36,000 people were killed in road accidents across the country last year and therefore, the Motorway police are making all efforts to check such deaths by ensuring adherence to traffic laws by road users

Dawn-News 2019

Following are some of the cases that will help you to understand the need and importance of this product:

1) Yasir is a first-year student at an engineering university. One day he got late for his class due to his puncher bike. He decided to take a bus that takes 10 minutes time to his institute as he approaches towards the bus, the crowd started to run and get into the bus there is no space left. He decided to hang in by holding a stand near the door. Since the bus is overloaded, someone from the bus falls on to him and eventually, he falls off the bus and while falling, he supported himself with his hand on the road. His arm bone breaks due to the pressure of his body. In this emergency he rushes towards the nearest hospital and there he got himself treated and in the end,doctor hands him over a heavy amount to be paid.

2) Mr Ahsan and family have decided to take vacations and travel by road to the northern areas of Pakistan. While they pack their bags and take all the safety measures they don’t know what is coming . While travelling, the weather conditions deteriorated resulting in Landsliding. The car encounters an accident and half of the family suffer severe injuries, the rest of them died on the spot.

3) Umer is an 18-year-old boy and he has gone for late-night studies at his friend’s place somewhere in Defence. At 6 O’clock early morning, he decides to come back home. One of his friends gives him a ride on his bike. On the way back, their bike gets hit by a heavy truck on Baloach Bridge and their Umer got his face scraped on the road badly with friction due to which his face got a severe injury which requires almost 40 stitches to intact the skin back. Whereas his friend got a few scratches on his hands.

In all these above cases, one thing is common. The accidents are unforeseeable and out of human control. These tragedies don’t come free. It does not only cause emotional damage but also big dent to your pocket. To control that, there are some of the reasons mentioned below as why you should consider to get Personal Accident Insurance:

1.Different from the Other Products

A personal Accident Insurance is a product that is going to facilitate your need in the situation of injuries, disabilities and death that is solely caused by an accident.

You might be thinking that why it is different from the other products available with the insurance companies i.e. Medical Insurance. Medical Insurance comes with the limitations on the coverage of accident cases whereas Personal Accident Insurance entirely covers the cases that lie under the accident; Which is sufficient as accidental events can take place to any age group…

Check Jubliee Self Care Insurance for the list.

2. No Panel Restrictions

Thes hardest job after facing an accident is to get the best treatment for yourself/your loved ones. That can be done only in the hospital that you are assured off. Sometimes, Medical insurance imposes restrictions over panel. You can only go to the hospitals that fall under the panellist. Whereas there is no such restriction with “Personal Accident Insurance” You can call the helpline number of Jubliee General Insuranceand can get more information on this matter.

3. No Physical Documents are Required.

Submitting your documents to claim insurance coverage in such a crucial time is a burden of its own. But there is no such demand if you are aligned with Jubliee General Insurance.There is no requirement of physical documents if you are the customer of Jubliee General insurance’s “Personal Accident Insurance”

Criteria to Opt Jubliee’s Personal Accident Insurance

• Eligibility Age: 18-65 years
• Non-Filer Tax: A charge of 4% additional withholding tax on non-filers
• Premium: Premium and limits may vary by plan chosen
• Geographical Limitations : Pakistan Only
• Claims Payment) : All claims will be payable in Pakistani Rupees only

Plans Available

There are 3 types of plans:

• Plan A with a limit of PKR 240,000/-
• Plan B with a limit of PKR 420,000/-
• Plan C with a limit of PKR 600,000/-

This is a basic guide towards the Personal Accident Insurance. For further details, feel free to call SmartChoice for buying this policy or log on to Jubliee General Insurance

Have a safe time

Khurram Zahid

The post Everything You Should Know About Personal Accident Insurance appeared first on Smartchoice.pk.

Two years ago SLIC still had a leading share (57pc) in the pie; today it is divided equally: 50pc with SLIC and 50pc is held by the private insurance companies with varying percentage of market share.

The imposition of an advance tax on life insurance premium would drive away small savers, having an adverse impact on the penetration of life insurance — Javed Ahmed

Asked if that was the case, Javed Ahmed, managing director of Jubilee Life Insurance Co. told that it was indeed so. He presides over Pakistan largest private sector life insurer in terms of gross written premium.

Formerly the New Jubilee Life Insurance Company Limited, Jubilee Life has been in the business for over 18 years as a life and health insurance company. Engaged in both individual life insurance and group insurance business, Jubilee has ventured into several new fields. The company’s initiatives include Bancassurance, Credit Life and Micro-Insurance. The company also started the Takaful business by opening up its Shariah-compliant ‘Window Takaful Operations’ towards the end of June 2015.

Most of the private sector life insurance companies, like banks, have started Takaful alongside their conventional business, hoping to add value and revenue by attracting the segment of the population that is wary of conventional banking and insurance products.

“Jubilee Life has launched 20 – 30 Takaful products through different distribution channels such as Banca Takaful arrangements with the company’s banking partners, direct sales from own branches, and corporates (employee benefits)”, says Javed Ahmed, adding that the results have been encouraging.

“Besides Life, Jubilee is also the largest provider of health insurance in Pakistan”, the company MD tells me and talks about the latest initiative of launching health insurance cover, mainly for the salaried class.” The company is also catering to the lower segment through micro-insurance products, designed to be affordable for the underprivileged section of society.

Jubilee Life Insurance Co. is a subsidiary of the Aga Khan Fund for Economic Development S.A, Switzerland, which holds 57.87pc stake in the company, representing 41.7m shares. Adding the shareholding with associated companies and related parties, the holding company together commands 83.03pc of the company’s capital. The general public holds 8.90pc shares, while foreign shareholders have a 4.71pc stake in the company.

The market price of the Jubilee Life Insurance stock, of a par value of Rs10, which stood at Rs290 two years ago, has currently climbed up to Rs530. The company’s market capitalisation amounts to Rs38bn against the paid-up capital of Rs721m. Total assets of the firm according to last released figures amounted to Rs721m on June 30.

The Jubilee Life MD complains of several measures decreed in the budget 2016-17. These include the imposition of an advance tax on life insurance premium which exceed Rs200,000 per annum.

Mr Javed believes that, although for non-filers, the new measure would drive away small savers, having an adverse impact on the penetration of life insurance in Pakistan, which already is a dismal 0.51pc of the GDP. Life insurance penetration in neighbouring countries such as Bangladesh is 1pc and India 4pc, while in the developed world the penetration goes beyond 10-15pc of the country’s GDP.

The other disconcerting step for insurance companies is the clamping of a uniform corporate tax rate of 31pc on all sources of income; a departure from different tax rates that were applicable for profit on the underwriting business; and considerable lower rates for other sources of income such as dividends and capital gains.

As insurance companies derive much of their income from the investment of surplus funds, the overall effective tax rate had been significantly lower when compared to the current measure; one which will dent the bottom lines of insurance companies. To further add to the burden, the Sindh Revenue Board has withdrawn its earlier exemption and imposed a sales tax on life and health insurance, treating them as ‘services’.

At the ceremony held on Sept 19 by the Pakistan Stock Exchange, Jubilee Life bagged the award of one of the Top 25 Companies for 2014.

For the latest released financial results for the half-year ended June 30, the company wrote gross premium revenue amounting to Rs17.6bn, which was 22pc higher than the premium of Rs14.4bn for the corresponding half year of the previous year.

The combined revenue account of all classes yielded a surplus of Rs1.54bn during the half year, representing growth of 30pc over the same period last year.

The profit after tax for the latest half year amounted to Rs808m, which was 20pc higher than PAT at Rs674m at the same time a year ago. The board of directors have declared an interim cash dividend at Rs3 per share for the year to end on Dec 31.

Khurram Zahid

The post State Life Insurance Company Loses Market Share To Private Insurance Companies appeared first on Smartchoice.pk.

“Finance Minister Mr. Ishaq Dar is said to have approved a budget proposal to charge a single income tax rate of 31% from the new financial year 2016-17, on all sources of income of insurance companies,” said sources in the Federal Board of Revenue (FBR).

At the moment, insurance income is put into various categories with tax rates from 10% to 32%. It’s pertinent to mention here that it’s not just the insurance sector that gets taxed within different brackets. Other corporate sectors also get the same treatment.

Finance Minister Mr. Ishaq Dar has also cleared a budget proposal to levy a withholding tax on insurance premiums,” added the sources. “A rate of 1% withholding tax may be imposed on life insurance while for general insurance it could be as high as 4%.”

According to an alternate proposal, the government is also likely to increase tax rates on health and life insurance commission agents who are non-filers of income tax returns, while the minimum tax on corporate service providers, who submit their accounts for audit, may also go up from 2% to 2.5%.

The size of the insurance business in Pakistan is very small, constituting about 0.8% of Gross Domestic Product (GDP) including the public sector insurance companies. This ratio is 3.8% in India, 3% in China and 8.6% in Germany.

According to the Insurance Association of Pakistan (IAP), there are six private insurance companies working in life insurance business excluding state-owned State Life Insurance Company. The private life insurance companies’ gross premium stood at Rs74.2 billion and they earned Rs3.2 billion profit after tax in the year ended on December 31, 2015. The 30 general insurance companies had gross premium of Rs61.3 billion and their after-tax profit stood at Rs13.6 billion, according to the IAP.

The government may increase the income tax rates on dividend income and capital gains to bring it at par with the standard corporate tax rate of 31% for the insurance sector, said the sources.

Currently, the income of insurance business, dividend income and capital gains is taxed in the range of 10% to 32%. The standard corporate rate of 32% will be reduced by 1% to 31% next year under a five-year corporate tax rate reduction plan. However, to counter the effects of this reduction, the government has been steadily increasing the rates of other source like dividend income.

The FBR thinks that insurance companies tend to invest in stocks and mutual funds to avail tax benefits and the purpose of a change in tax structure is to discourage this tendency.

The private insurance business hardly exists in the country and any upward revision in tax rates will have devastating effects on the sector and the insurance cost will go up, said Policy Research Institute of Market Economy (PRIME) Executive Director Ali Salman.

“The heavy presence of public sector in the insurance business is also detrimental to the sector’s growth. Moreover, the foreign exchange that the country earns by exporting the re-insurance services could also get affected due to these changes,” he added.

The government may also slap 1% withholding tax on life insurance premiums and claims and 4% on general insurance. The insurance sector is so far exempted from payment of withholding tax.

The commission paid to life and health insurance agents is taxed at the rate of 12% for filers and 15% for non-filers. The government may reduce the rate for filers to 8% but for non-filers the rate may be proposed to increase to 16%.

Khurram Zahid

The post Insurance Sector To Become Victim Of Drastic Tax Structure Reform! appeared first on Smartchoice.pk.

Let’s take things in a chronological order. You have just completed your academics and stepped into professional life and have got a job that lets you earn enough that you can save a little out of it. A very wise idea at this moment in time is to get a life insurance policy as it’ll give you the longest possible amount of time to save up and since you are at a point in time where you don’t have any dependents (or have the least amount of dependents in case of parents) you are able to save more as your expenses are comparatively lesser than someone who is married and has children. Insurance policies typically don’t cost a lot and thus it’s relatively easier to pay the premium. At this time you should ideally be looking at obtaining a policy that lets you accumulate your wealth over a period of time.

Supposedly you’re out of the age bracket when a person is just stepping into professional life. You’re married but don’t have children yet. At this point in life you have a multitude of options to choose from. Getting a retirement plan or a family insurance plan is a good idea as it will cover your dependents as well as help you have a good return by the time you retire and thus you will not be burdened by the worry of financial woes when it’s finally time to sit back and have some time for yourself.

Next comes the scenario where you are married and have one or more kids. Every parent has two dreams for their kin. One is to achieve a good position in academics and the second is to get them happily married off. For the first situation the best way is to invest in an education plan that will cover your child’s educational expenses in case of death or disability or loss of job. Also it can act as a fund to pay for the university fee if your child plans on studying abroad. It’s equally important if you’re planning for your daughter’s marriage as it’s the biggest event of her life and you’ll want everything to be perfect so she starts her new life with utmost joy and happiness hence a suitable marriage plan will help you accomplish all these things.

Last but not the least let’s talk about insurance plans for women. In yesteryears, insurance products were only aimed at the male part of the society as they were considered the sole breadwinners for the whole family and everyone else was thought of as a dependent. However in recent times, women have become an active part of the workforce as well as housewives have gotten more recognition for their efforts thus insurance providers have also come with plans that are made exclusively for the female part of the society.

We feel that life insurance is a really useful product in various scenarios and it’s never too late to get such a beneficial product and you should really take it into consideration to enjoy your life with complete peace of mind. SmartChoice.PK is an online price comparison platform that will soon let consumers in Pakistan compare and order insurance policies online as well as order a policy of your choice.

Khurram Zahid

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