Like many other segments, insurance plans do have an impact on Aaam Admee for paying service tax. Finance Minister Mr. Pranab Mukharjee has proposed to remove service tax which was collected on Insurance schemes except from ones which include FMC which will result in lower premium which is a good news.
What is FMC ?
FMC stands for Fund Management charges which is charged when there is a cashless facility i.e. Insurance company takes care of paying on behalf of you. Examples of Plans where FMC is included :
ULIP :
- Up-front Charges
- Mortality Charges
- Administrative Charges
- Fund Management Charges
Mutual Fund :
- Up-front charges
- Fund Management Charges
So overall the premium has gone down for insurance plans but you may have to pay more when it comes to cashless facility under a medical insurance plan.
