An insurance policy which covers the medical and surgical expenses of the insured is called a health insurance policy. Typically, insurers in India provide the following types of health insurance:
- Hospitalisation Policy: Only hospitalisation costs are covered; The individual bears other costs.
- Critical Illness Policy: A set of predetermined critical illnesses are specified in the policy. On the diagnosis of such diseases, a lumpsum amount is provided.
- Family floater Plan: Insured and the family members are covered under one policy. The insurer provides a fixed insured amount for all the members.
The Importance of Health Insurance
Due to daily stress and hectic lifestyles, health has indeed become a wealth that people are looking to protect. At the same time, one of the sectors which are undergoing steady inflation is the healthcare sector. Instead of paying hefty bills once you are afflicted with a disease and hospitalised, you can pay a small premium to obtain an insured amount.
In the case of adults, any individual between the age of 18 and 65 years is eligible to obtain a health insurance policy. In the case of children, eligibility is between 90 days and 18 years. Do note that the amount of premium increases significantly as the insured grows older. So, it is recommended to purchase the policy at the earliest.
Tax Benefits of Health Insurance
Section 80 of the Income Tax Act provides a host of tax benefits for a health insurance plan:
- In case of paying a premium for self or family, a tax deduction of Rs 25,000 can be made. Additionally, a premium paid in case of parents who are below 60 years of age is eligible for a deduction of INR 25,000. In the case of parents or family members above the age of 60 years, an amount of INR 50,000 is eligible for a tax deduction.
- Insurance policies in case of Hindu Undivided Family (HUFs) provide a tax deduction of INR 25,000, where the premium is paid for the health insurance of one of the members of the HUF.
- If you incur any expenses towards a preventive health check-up, you are eligible for a tax deduction of INR 5,000, which is part of the overall limit of INR 25,000.
Now that you know about the health insurance tax benefits in India, it’s time you stop worrying about high medical bills and get started with saving taxes on medical insurances.
Disclaimer: For more details on risk factors, terms & conditions please read sales brochure carefully before concluding a sale