1. Limit of Claiming Tax Benefit
As per the Indian Income Act, the premium paid towards health insurance is exempted from the tax deduction. The amount of tax benefit that one receives depends upon the age of the insured person. Section 80D of Indian Income Tax Act allows an individual to claim tax benefits up to a certain amount on the premium paid for his/ her spouse, parents, children, irrespective of whether they are dependent or not. Under section 80D of the Income Tax Act, you can claim a tax exemption of up to Rs 1,00,000.
2. Amount of Saved Tax
If you are under 60 years of age, you can get a deduction of up to Rs. 25,000 on insurance premiums paid towards health insurance policy for yourself, spouse, children and parents.
Senior citizens can claim a tax exemption of up to Rs. 50,000 on premiums paid towards the health insurance policy.
You can avail both the exemptions (A total of up to Rs. 75,000) if you are under 60 and your parents are above 60 years of age.
3. Medical Check-ups
It is always recommended to keep a constant eye on your health because of the rise in lifestyle diseases. Thus, many hospitals provide preventive health check-up packages to your benefit.
4. Offering Tax Benefit
Along with indemnity-based plans, defined benefit plans also come with tax benefits. Under Section 80D of the Income Tax Act, the premium paid for indemnity plans like Mediclaim policies and defined benefit plans like daily hospital cash or critical illness plan are eligible for tax benefit.
5. Separate Plans for Parents
You can buy separate health insurance plans for family members to maximize your tax profit. The only condition is it requires more health checkups and the premium will be comparatively higher as well. Two separate plans for senior citizen helps you to earn tax benefits and you can ensure sufficient funds to take care of the financial obligations that may arise in case both the parents meet with a medical emergency.
While buying health insurance, saving on tax should not be your only concern. Health insurance protects you against unintended medical expenses. However, it comes with tax benefits, which turns to be additional savings for an individual. It is recommended to buy health insurance keeping the requirements in mind and analyzing the cost of unexpected possibilities. Make an informed buying decision as different plans come with different features and benefits. Compare policies and customize your plan to include your loved ones and address their necessities as well to make the most out of your health insurance policy. Always make it a point to read the policy wordings before you purchase a policy. This will help you to understand your coverage, inclusions & exclusions better. You can also evaluate you premium rates using a health insurance premium calculator online.