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Why Maximum People Buy Health Insurance For Tax Benefits
[Posted by: InsuringIndia Blog on 17-Feb-2016]

In a scenario of fast paced technology, increasing number of diseases, stressed lifestyle and escalated cost of medical care it is imperative to invest in a comprehensive health insurance cover for yourself and your family. While you're planning for your today and a safer tomorrow, there are a number of other reasons which make it clear that investing in a good policy is the best bet for your financial security. Besides taking care of medical & hospitalization costs, a medical health insurance gives you tax sops like no other policy. This dual advantage is the main reason why many people prefer taking a health cover also as a tax benefit.


What is Health Insurance 


A health insurance primarily gives you protection against escalated medical and surgical needs and is a way of ensuring that you can afford proper medical care without any stress. Like any other policy, here too a policy holder pays a certain premium to the insurance company. It varies from one company to another. 


Why you should opt for health insurance 


Illness or grievous injury does not come with a prior warning. If you are not insured to deal with these tough times, then not only will these eat into your emotional well being and savings, but it will also impact your financial future. 


The market is replete with choices -- individual health insurance, family insurance, health insurance for senior citizens and critical illness among others. While choosing a health insurance cover, always consider how much you are willing to pay and what suits your needs the best. Always choose a comprehensive policy which has maximum advantages. 


How do tax sops work in a health policy


·         While calculating one's taxable income, the premium paid for a health insurance policy can be deducted from the total income under Section 80D of the Income Tax Act, 1961. The premium payment has to be done from card or cheque to qualify for tax deduction, paying with cash doesn't count. 


·         Deduction under section 80D for self, spouse, dependent children – Rs 25,000 (preventive health check up of Rs 5,000 included).


·         Whether your parents are dependent on you or not, a deduction for parents who are senior citizens is allowed up to Rs 30,000 under section 80D of the IT Act. 


·         In case your parents are in the age bracket of more than 80 years and are uninsured, you can claim a maximum of Rs 30,000 as tax deduction towards their medical expenses.


·         Under section 80D, earlier the income tax deduction allowed was Rs 15,000. Now, it has been raised to Rs. 25,000. The tax saving will be Rs. 3,000 who are in 30% tax bracket and Rs. 1,000 for those who are in 10% tax bracket.


·         If you're less than 65 years of age, you're eligible for tax deduction up to Rs 15,000 on a health policy for yourself, your spouse and your children.


Advantages of Health Insurance 


·         Lump sum is given in event of a critical illness

·         Convalescence allowances

·         Ambulance and attendant services

·         Tax benefits

·         Hospital costs like room rent, prescription drugs, lab tests, services and devices that aid your recovery


While buying these polices always read the fine print and compare existing policies -- premium, benefits, disadvantages, sops, terms and conditions--to see what suits your needs the best. It's always best to buy an insurance policy online as it saves time, is cost effective & is a transparent option.


Get Check Quotes of the Health Plan in India. 

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*This is based on the difference between the highest and lowest premium's for a single person, age 25, looking for an individual health policy with the sum insured of Rs. 5 lakhs.
**This is based on the difference between the highest and lowest premium's for a single person, age 25, looking for a term plan, with the sum insured of Rs. 30 lakhs, and the premium paying term of 30 years.
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