How Much Tax Can I Save With A Health Insurance Plan?

Health insurance plans come with a wide range of benefits and features to offer to its policyholders. These benefits increase the value of the health insurance policy thus making it more fruitful and worthy for the customers. Benefits and features of the policy is one of the major factors that influences the choice of the people when buying a health insurance cover. Some of the standard benefits offered by a health insurance policy are hospitalization costs, ambulance charges, room rents, consultation fees, organ donor expenses, medication costs, lifetime renewability of the policy, tax deduction, cashless claims, no claim bonus, and a lot more. One of the most attractive benefits is the tax deduction benefit of the health insurance cover. 

Many individuals invest in health insurance policies to escape the taxes and get tax deduction on the premium payments of their health insurance cover. Under section 80D of the Income Tax Act, the policyholders are eligible for tax deduction on their health insurance premiums. But, it is usually advised that tax reduction should not be the sole reason to get a health insurance cover, as the insurance policy bought without considering other factors can pose to be of no use at the time of medical emergency.

How Much Tax Can Be Saved In A Health Insurance Cover? 

Health insurance policies can be for an individual or for a family depending on the number of members included under the plan. Under section 80D of the Income Tax Act, you can save your taxes on premium payments which can be up to Rs. 25,000 but if your parents insured under the family floater plan are senior citizens then the limit of tax reduction can go up to Rs. 50,000. Under family floater plans you can cover yourself, your spouse, children, and parents, and get a single sum assured policy for all the members covered under the plan with deducted tax on premium payments due to tax deduction benefit.  Also, you can up to Rs. 5000 on your annual health checkups with the help of the tax deduction. 

Various Scenarios In Tax Benefits Under A Health Insurance Policy

Tax deduction is offered by almost all the health insurance providers but can differ according to the age of the applicants and the inclusion of members in the health insurance policy. Let us look at the eligibility of the tax deduction of certain amount on a health insurance cover: 

• If you and your dependent parents are insured under a policy, then claim an amount of up to Rs. 25,000 for the insured and an amount of Rs. 25,000 for folks are often allowed against your premium payments. 
• If you, your spouse, children below 60 years, and your dependent parents above the age of 60 years are included in a health insurance policy, then Rs. 25,000 claim allowed against the premium purchased for you and your family and Rs. 50,000 additional claims allowed against the premium purchased for your parents.
• If you, your spouse, children, below 60 years, and your parents above 60 years are a part of a policy, then Rs. 50,000 claim is allowed against the premium paid for you and your family and additional Rs. 50,000 allowed on premium paid for your parents, thus summing up to Rs. 1 Lakh. 
• For HUF (Hindu Undivided Family) claim of around Rs. 25,000 for you and your family and Rs.25,000 premium paid for parents can be claimed as tax benefits on your purchased health insurance policy. 
• For non-resident individuals, Rs. 25,000 for the policyholder and his/her family is allowed. For the elders, tax saving benefits on the health insurance policy is taken into account as long as they are above the age of 60 years, or are senior citizens. 

Conclusion 

Tax saving benefits add extra value to the purchased health insurance policy of the individual and can be availed on almost all the health insurance covers provided by several health insurance providers. You must know the terms and conditions of your health insurance policy to avoid any inconvenience at the time of claim settlement. 

Must Read: How You Can Save Taxes with Medical Expenses?

Ways To Save Tax With Health Insurance

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.