5 Lesser-Known Facts On Tax Benefits While Buying Health Insurance
Chaos ensued post the beginning of the pandemic in 2020 and it has still continued to dominate our lives every day. Every sphere of life was affected and no one was spared the wrath of the contagious disease.
This led to re-evaluating the backup plans everyone had for their future and the most common concern was the need for a good and strong health care plan.
The benefits of health insurance start from the monetary aspect and end at attaining peace of mind. A robust health insurance policy takes away the stress of the financial burden when medical emergencies arise.
One of the monetary benefits is the tax benefits on health insurance that can be claimed. Depending on the amount you have spent in the year on premium towards health insurance you are eligible for certain benefits depending on which bracket you fit into.
However, you should remember that buying health insurance is a serious responsibility and the policy should not be chosen based solely on how much exemption one might get.
Also Read: Term Life Insurance Myths Busted
Here are a few lesser-known facts pertaining to health insurance and tax benefits.
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Avail Eligibility on Health Insurance Offered by Life Insurance Companies
According to section 80D, the tax benefit is on the premium paid towards the health policy. This means you don’t necessarily have to buy a healthcare plan from health insurance companies.
The amount paid towards riders in a life insurance policy pertaining to critical illnesses and medical emergencies are also eligible for tax benefits. Likewise, the premium paid towards health insurance policies from life insurance companies is also eligible for tax benefit.
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Avail Tax Benefits by Paying Premiums for your Family
Taxpayers can claim a maximum deduction of 25,000 rupees against health premiums paid for self, spouse, and dependent children.
However, a maximum deduction of up to 50,000 rupees if the medical insurance policy includes dependent parents below 60 years of age can be claimed. If parents are above 60 years of age, then 75,000 rupees can be claimed in total.
The premium paid towards the health insurance policy of your parents, spouse, and children is eligible for tax benefits. Although, this is only in case you are the ones paying the premium. The benefit is available even if your parents or children are dependents or not.
Also Read: Don’t Cancel That Policy Yet! 10 Benefits Of Life Insurance For Seniors Over 65
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Avail Free Health Check-Ups
Within the range of 25,000 rupees to 30,000 rupees maximum, preventive health check-ups get a benefit of up to 5,000 rupees. In simpler terms, if you pay a premium of 20,000 rupees towards health insurance and get a health check-up of 5,000 rupees done, you can claim 25,000 rupees under section 80D.
Health insurance companies collaborate with hospitals and most hospitals have the facilities for health check-ups. There has been a steady rise in the ailments related to heart, blood pressure, blood sugar levels, bones, and they can start at an early age.
Preventative health check-ups are one way to ensure you receive treatment at the right time.
The tax benefit is applicable on both individual health insurance plans popularly called Mediclaim and family floater plans too. Standalone plans for critical illnesses are also eligible for this benefit.
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Tax Benefits Specially Offered for Senior Citizens
If an individual is above 60 years of age and makes the payment of premium for self, spouse, dependent children, and dependent parents who are also above 60 years of age, 1 lakh rupees can be claimed as a deduction.
Senior citizens between the ages of 60 to 80 years are eligible for a deduction of 60,000 rupees. Senior citizens above the age of 80 years are eligible for a deduction of 80,000 rupees.
Also Read: Don’t Do It Alone: The Importance Of Health Insurance
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Tax Benefits Not Availed When Paid Premiums in Cash
The total premium paid towards tax benefits is eligible for the exemption if you are able to provide sufficient proof. If the payments are made in cash, then the insured is not eligible for exemptions. If you have paid via a cheque, bank transfer, a draft, or by any other means that can be corroborated by the bank, the. cash payment of premium can be done but it is not eligible for tax benefits.
Bottom Line
These are a few of the lesser-known facts that should be remembered while filing your taxes. While health insurance gives you the comfort in the knowledge that you have a plan in case of emergencies, it also helps you save your hard-earned money in the form of tax benefits.
It is advisable to get health insurance as soon as you start working and can afford one. You can look at a basic health insurance plan, to begin with, and keep on upgrading as per your requirement. There are many packages and add-ons that health insurance companies offer using which you can customize your healthcare package.
