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Health Blog
07 Nov 2024
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In these times of medical inflation, health insurance is no longer a luxury but rather a necessity. However, there are some diseases for which your regular health insurance plan may require the support of additional coverage, such as a critical illness insurance plan. It is a plan aimed to provide coverage against serious, life-threatening illnesses, such as cancer, paralysis, strokes, and so on. Buying a critical illness insurance policy can help you rest assured about your finances if a critical illness were to come knocking at your door. However, that is not the only benefit it provides. A critical illness insurance plan also provides tax benefits to the policyholder under Section 80D of the Income Tax Act, 1961. Claims are subject to terms and conditions set forth under health insurance policy. Let’s learn more about the tax benefit you can claim with the help of critical illness insurance.
Section 80D of the Act primarily deals with tax benefits that one can claim against their health insurance plan. Hence, many people may wonder if these benefits are also available for other types of health-oriented insurance plans, such as critical illness insurance. The straightforward answer is 'yes’, you can claim Section 80D tax benefits with the help of a critical illness insurance plan. Here’s how:
Let’s use an example to better understand the above points: Mr Jeet’s family had a genetic history of cancer. To protect his family and finances from the onslaught of cancer and its treatment, he bought critical illness insurance. He bought one plan for his parents (both over 60 years of age), whose premium was ₹25,000. Since his parents were above the age limit, he could claim the entire amount as a tax deduction. He also bought another critical illness insurance plan for himself and his wife (both under 60 years of age), whose annual premium amounted to ₹15,000. He could also claim the whole amount as a tax deduction since it was under ₹25,000 and the couple were under the prescribed age limit. He did not have any other active health insurance policy. Thus, under Section 80D, he can claim a total of ₹40,000 as a tax deduction. Claims are subject to terms and conditions set forth under health insurance policy.
Note: This tax benefit on health insurance is only applicable to taxpayers under the old tax regime. Individuals who are paying taxes under the new regime are not eligible for these benefits. **
To make the most of your critical illness plan, it is important to have a clear idea of how such a plan works. Here are some pointers on the same:
Claims are subject to terms and conditions set forth under health insurance policy.
Critical illness insurance should ideally be bought as a supplement to your regular health insurance plan . While the latter takes care of standard hospitalisation, the former comes to the rescue in case of a diagnosis of a severe illness. Claims are subject to terms and conditions set forth under health insurance policy.
* Standard T&C apply.
** Tax benefits are subject to change in prevalent tax laws. Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.
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