Health plans provide us with a way to make sure that we have the finances to ensure that we are not left struggling to pay the bills for any health costs that may arise. In India you can invest in both individual health insurance as well as family floater plans. But people invest in these plans for more than just the medical benefits they provide. They allow you to partake in a cashless network of hospitals and they deal with the administration in order to reduce your burden as far as possible.
But one of the biggest benefits of health insurance is the tax benefit that it provides. Many people, especially those who are at a very low risk for health issues, look at investing in these policies as a means to save their taxes. Most premiums paid towards health plans offer a tax deduction under Section 80D of the Income Tax Act.
These deductions are available to individuals and members of Hindu Undivided Families. There is a Rs. 15,000 per year deduction for any plans taken out on oneself, spouse or offspring. In the case of parents, the deduction for parents below the age of 60 provides an additional Rs. 15,000 deduction, while policies taken out on parents over the age 60 come with a deduction of Rs. 20,000 per year. All together, a person can gain Rs. 35,000 on their taxes by investing in these policies.
When planning for taxes, investing in parent’s healthcare is always ignored. Many people, including a number of accountants are unaware of the Rs. 20,000 additional deduction on health insurance plans taken out on one’s parents. From a less monetary angle, these policies also ensure that a person’s parents have their entire medical needs taken care of. In order to avail of these deductions, the payments of premium cannot be paid in cash.
These deductions are also not available for people investing in corporate health plans. This is because these policies are taken in the name of the company. However, these deductions can still be availed of, even through the corporate schemes, if the premiums are paid for using a payroll deduction or by online electronic payment methods. In a way, these deductions are the government’s way of encouraging individuals to obtain Mediclaim coverage for themselves and their family members.
There are a number of health insurance policies that are available in the market today. When selecting one it is important to get the best information possible, by reading about theses policies online and comparing one to another. This affords a person the best chance of finding a plan that fits their needs in terms of coverage offered and premium payments required.