Health Insurance Tax benefits

You may be in the pink of your health now, however, considering the surge of lifestyle diseases, a medical crisis can arrive unannounced anytime. The last thing you want to stress over in such circumstances is finances. Hence, putting resources into medical coverage, especially a critical illness cover like Heart and Health Insurance Plan (HHI), can't be a choice, it ought to be a necessity today.

After All, it's all about financial security, hoping you are not required to use the coverage purchased but hedging just in case. But there is more to this online health insurance than just covering medical expenses and treatment costs.

Investing in an online health insurance plan like ‘Heart and Health Insurance Plan’, also comes with its own set of tax benefits.

  • Tax Benefits Under Section 80D:

    The premium paid towards Heart and Health Insurance Plan qualifies for deduction under Section 80D of the Income Tax Act. The benefit is available for premiums paid for self, spouse, parents and children.

    What does Section 80D entail?

    • All health policies and critical illness plans qualify to avail tax benefit

    • Payments made towards preventive health check-up also qualify for deductions

    • As mentioned earlier, payments can be made for self, parents spouse, dependent children. But no deductions can be claimed if the premium is paid for independent children

    The benefits under this section are as follows:

    For Self and Family:

    • Maximum Tax benefit of Rs25,000 per year on premium for self and family

    • Maximum tax benefit of Rs 50,000 per year if you are a senior citizen (this amount has been increased in ‘Budget 2018’ from Rs 30,000)

    For Parents:

    • Tax benefit of maximum Rs25,000 per year on premium paid on behalf of parents who are not senior citizens

    • Tax benefit of maximum Rs 50,000 per year on premium paid if parents are senior citizens

    Additional Deduction:

    • A deduction of Rs 5,000 can be claimed every year on health check-ups related expenses.

    Possible scenarios Maximum Tax Benefit Total Deduction Available
    Self Parents
    If every member is below 60 years Rs 25,000 Rs 25,000 Rs 50,000
    In case you are below 60 years and your parent is above 60 years Rs 25,000 Rs 50,000 Rs 75,000
    If you are above 60 years and your parent is above 60 years Rs 50,000 Rs 50,000 Rs 1,00,000
    Preventive health check-up Rs 5,000 Rs 5,000 Rs 10,000
  • Example:

    Suppose you are 35 years old and pay a yearly premium of Rs 30,000 for your Heart and Health Insurance Plan. Aside from this, you are also paying a premium of Rs 36,000 for your father’s plan, who is 62 years old. According to Section 80D, you are eligible for:

    • Tax deduction of Rs 25,000 on Rs 30,000 paid as premium for your HHI plan

    • Tax deduction of Rs 36,000 for your father (senior citizen) out of the overall payment of Rs 36,000

    The total tax deduction that can be claimed is:

    Rs 25,000 + Rs 36,000 = Rs 61,000

Ending Note:

Buying online health insurance like Heart and Health Insurance Plan Not only helps you financially by waving off the sky-rocketing treatment expenses and medical bills when you face an emergency, but also saves tax. The fact that this online health insurance plan secures your finances during an unforeseen medical emergency is great, but tax benefit remains the icing on the cake.

Hope the information above helps you to know how much you can save on tax based on the premium paid for your online health insurance, i.e. ‘Heart and Health Insurance Plan”.