Medical advancements in today’s day and age are keeping up to treat the ever-evolving forms of ailments. These treatments can be expensive and can easily take a toll on your savings. To combat the increasing prices of healthcare treatments, one needs to have a backup plan. This plan can include having a huge corpus of money specifically set aside for medical purposes. While this may seem unreasonable, medical insurance is the perfect way to obtain coverage for these unpredictable illnesses.
Apart from acting as a backup plan, health insurance plans help to obtain financial coverage that might be required for these expensive medical treatments. Moreover, health insurance coverage can also be increased to meet the rising inflation levels. For instance, the insurance plan purchased at the beginning of your career might not be sufficient when you have a family to look after. This is when buying a health insurance
policy benefits since its coverage can be enhanced periodically. These insurance plans are available in a host of alternative to meet your medical needs which include maternity coverage, cover for critical illnesses, plans specifically meant for senior citizens and more. Apart from that, a health insurance benefit also includes a deduction in your total income when computing your tax liability.
What are the tax benefits of health insurance plans?
While different plans can be purchased for varying medical requirements, all of these health insurance plans are eligible for tax benefits. Section 80D of the Income Tax Act
, 1961 allows a deduction of the premium paid for these health insurance policies. Not only for the policyholder, but also for its dependents which include children and parents. While the deduction is available whether the beneficiary is dependent or not, the amount of deduction is based on the age of the beneficiary.
Where the primary policyholder, i.e. you, and your spouse and children are below 60 years of age, a deduction of ₹ 25,000 can be availed. The same amount of benefit is available for your parents if insured using a individual or family health insurance
plan. In the above instance, if your parents are classified as senior citizens (over the age of 60 years), this deduction for the premium paid is available up to a sum of ₹ 50,000. The same enhanced deduction can be availed in case you or your spouse is above 60 years, too. This is summarised in the table below -
|Health insurance policy for
|Deduction for self, spouse and children
|Deduction for parents
|Self, spouse, and children (all below 60 years)
|Self, spouse, children and parents, all below 60 years
|Self, spouse, children below 60 years and parents classified as senior citizens
|Self, spouse and children and parents, all classified as senior citizens
Are preventive health check-ups included in health insurance plans?
The above limits include a sub-limit of ₹ 5,000 which is for a preventive health check-up. A preventive health check-up is a way to ensure the diagnosis is done at an early stage so that treatment, if required, can be availed. This way, you can save thousands by getting yourself checked. Some insurance plans include coverage for a preventive health check which is a routine check-up by the physician or a general practitioner. Some health insurance plans also include the facility to conduct routine tests to determine early signs of long-term critical illnesses. To avail the tax benefit of preventive health check-up, you need to incur the expenditure during that particular financial year. Moreover, the deduction of this expenditure can also be availed if it is paid in cash, too unlike health insurance plans where you are mandatorily required to pay via organised banking channels.
This information regarding the tax benefits of health insurance premium and the preventive health check-up facility can help you save taxes and get yourself checked periodically. However, tax saving is an additional benefit and your primary concern for a health insurance cover is to ensure a financial backup for medical treatments. So, compare well and choose the best plan for yourself. Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms and conditions, please read sales brochure/policy wording carefully before concluding a sale.