Health Insurance Plans

pays for your hospital bills for diagnostics, surgery etc.

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Tax Tips: Health Insurance

| | Health Insurance

There are so many ways in which you could do yourself a world of good in the world of investment. One way in which you could protect yourself and your family from the rising costs of healthcare and the risks associated with it, while also making sure you save enough considerable part of your earnings through tax savings, is through the instrument of health insurance.

The context – inflation and healthcare costs: As an individual, there is no way you could have any say over the rising costs and the soaring rates of inflation. However, as a savvy investor, you have all the rights to take the right decision and staking a Claim through medical insurance. When you consider that money saved is money earned, the most plausible way you could have some leverage in the face of rising Inflation would be through mediclaim.

Section 80D and Tax Savings: One of the first things to remember when you consider your investment in medical insurance would be the tax savings that you could realise from your decision, apart from the medical benefits that you could afford as a direct result of your investment decision. What the section means is that the law provides for you to be exempted from income tax on the amount of Premium that you pay on your health insurance to as much as Rs 15,000. Further, if you have invested in Mediclaim for your dependant parents, you would have further tax savings of Rs 15,000. The exemption limit extends to Rs 20,000, if one of your dependant parents also happens to be a senior citizen.

Points to note with regard to Health Insurance and tax savings: While you would be eligible for tax deductions as mentioned earlier, it is important to note the kind of payments that you need to make to be able to realise your tax benefits. You need to pay your health insurance premium by check or by using your credit card, since cash payments are not recognised for tax purposes.

Further, there is also the additional benefit of many people sharing into the tax benefits associated with mediclaim in such cases that involve the presence of more than one payee in settling the premium of one health policy. However, such deductions in income tax would still be based on the overall limits that the mediclaim may be eligible for.

The bottom-line: In effect, there are many ways in which you could seek to obtain tax savings from your investments. However, it is government initiative to get more people pooled into the benefits of medical insurance that such tax benefits are available for the premium paid on mediclaim. Make sure you get both the benefits of health as well as wealth with your medical insurance.