With medical inflation in India increasing at the rate of 12-15% annually, any medical emergency can deplete your savings. Thus, the primary reason to buy health insurance is to safeguard against financial woes and ensure private healthcare for you and your dependents. Besides covering for medical expenses, you can buy health policy for tax benefits as well. The premium for medical insurance, whether online health insurance or an offline policy, is eligible for tax deduction under Section 80D of the Income Tax Act of 1961.
Let’s take a closer look at the various tax deduction parameters available for health insurance policies.
- If all the family members of the primary policyholder are below 60 – Tax deduction up to ₹ 25,000 is available for health insurance premium paid for self, spouse and dependent children. If parents below 60 years of age are included in your online health insurance policy, you are further eligible for a tax deduction of ₹ 25,000. Thus, the maximum tax exemption you can avail annually is ₹ 50,000.
- If the oldest family member in the family (self, spouse and dependent children) are below 60, and parents are above 60- In this scenario, the exemption limit of ₹ 25,000 is applicable on the premium you pay for yourself, spouse and children. However, if your parents are above the age of 60, you are eligible for a maximum deduction of ₹ 50,000 for the premium you pay on the online health insurance policy for your parents. Thus, the maximum tax exemption you can avail annually is ₹ 75,000.
- If the oldest family member (self, spouse and dependent children) is 60 and parents are above 60- Here, as the oldest member of the family (the policyholder) you are eligible for a maximum tax exemption of ₹ 50,000 on the premium of the online health plan you pay for yourself, spouse and children. However, if your parents are 60 years of age, you are further eligible for a maximum deduction of ₹ 50,000. Thus, the maximum tax exemption you can avail annually is ₹ 1,00,000.
Benefits beyond pure protection
It is evident that when you buy health policy, the tax exemption can help you save considerably. However, customers also expect additional benefits when they buy health policy. For instance, Reliance Health Insurance not only offers easy-to-use health plans, but also offers rewards such as enhanced coverage benefits. For example, you can get an additional month’s coverage on a policy tenure of 12 months and an additional two months’ coverage on a policy tenure of 24 months, without extra cost.
Further, taking into consideration the need to hedge the risk of rising medical prices, insurer also offer additional coverage of ₹ 2 lakhs on ₹ 5 lakh cover, and ₹ 3 lakhs on ₹ 10 lakh cover. As a result, buying this insurance policy can easily translate into monetary benefit for the policyholder.
Given the numerous benefits that health insurance plans offer as illustrated above, it is prudent to buy a health policy not just for financial protection during medical emergencies but for the best return on investments as well.