For people who make a living wage, a health insurance plan for parents under an employer's plan is a comfort. While protecting your health should always be your top priority when buying health insurance, the tax deduction is a great side benefit.
Do you have any plans to purchase health insurance for your parents? Well, there are many healthcare plans specifically created for parents who are older than 50 years old in the Indian insurance market currently. Furthermore, many insurance companies provide family healthcare floater plans with tax benefits specially created for families with senior individuals.
A health insurance plan specifically designed to cover parents' medical expenses is called a health insurance policy for parents. It provides comprehensive protection against age-related illnesses that could cause costly medical bills. In addition to offering attractive features like annual health checks and cashless medical care, it also has a greater insured amount to help people properly manage their medical costs.
You must purchase comprehensive health insurance coverage for your parents to receive the greatest medical care without financial stress. Consequently, you can consider the following factors while choosing the best health insurance plan for your parents.
You should carefully review the benefits of the policy's coverage. Consider certain important aspects, such as the length of the policy, the pre-and post-hospitalization coverage, the critical illness coverage, the daycare procedures, the in-patient hospitalization, the Ayush treatment, the domiciliary hospitalization, etc.
You must choose a greater total insured amount because your parents are older and more susceptible to health hazards. It will guarantee that they may receive the greatest care possible without facing any financial limitations.
It won't be covered until the waiting period, typically between two and four years, has passed if your parents have pre-existing medical conditions. It may change depending on the plan chosen and the differences between insurers. Check the time period after which your family's health insurance plan will cover the pre-existing conditions.
you will be responsible for paying on your own. The health insurance company covers any remaining medical costs. For instance, if your policy has a 20% co-pay clause, you would be responsible for paying Rs. 2 lakh out of your personal funds for a claim of Rs. 10 lakh, with the remaining Rs. 8 lakh being covered by the insurance provider. You can also choose a "no co-pay" clause.
Section 80 D of the tax code allows you to deduct the cost of your parent's health insurance premiums. Your total tax benefit on health insurance premiums is limited to Rs 50,000 if you are paying for yourself, your parents, and any other dependents under the age of 60. Additionally, if your parents are older than 60, the limit is raised to Rs 75,000. As a result of the applicable tax limitations, this might, however, change.Additional Read: What is a Deductible? What are the Benefits of a Health Insurance Policy?
Hospital bills can undoubtedly cause a hole in anyone's wallet. You can obtain insurance coverage for the following costs with a health insurance policy:
Understanding the health insurance coverage the policy provides is essential. There are a few situations where the insurer won't cover the medical bills, as listed below:
According to domestic tax law, if a person is paying the premium for their parent's health insurance, they are eligible for a tax deduction of up to Rs. 15,000. The deduction is up to Rs. 20000 for parents who are 60 years or older, i.e., senior citizens. And in such instances, the last premium payer is not considered for any process. As a result, even if your parents are pensioners, you can still pay for their health insurance and receive a tax refund.Additional Read: How to Claim Tax Benefits on Premiums Paid towards Health Insurance?
Under Section 80D of the Income Tax Act, the premium for your parent's health insurance policy is deductible. The benefit is accessible to anyone who pays for their health insurance and their spouse, children, and parents. It is important to note that it makes no difference if the parents or children depend on you.
However, the amount of the tax advantage is based on the person's age and level of medical insurance. The maximum deduction of Rs 25,000 per year on premiums paid for oneself, one's spouse, children, and parents is only available if the person is under 60 years old. The most an individual can pay for a health policy for a parent who is a senior citizen (60 years of age or older) is Rs 30,000.
Therefore, if the taxpayer is below 60, but the taxpayer's parents are over 60, the taxpayer may maximize the tax benefit under Section 80D to a total of Rs 55,000. The highest tax advantage under section 80D would thus be a total of Rs 60,000 for those taxpayers who are 60 years or above and are paying health insurance premiums for their parents.
In accordance with current laws, a GST of 18% is applied to the premium paid for health insurance . Under section 80D of the Income Tax Act, tax benefits for the cost of health insurance policies can be claimed. A basic premium of Rs 7,843 and GST of Rs 1,412 would be required if, for instance, you were to get a health insurance policy from Bajaj Allianz General Insurance Company at the age of 30 with a sum insured of Rs 10 lakh (18 percent GST applied on basic premium). It will cost Rs 9,255 in total for the premium.
Similar to the above, a person who buys the same policy at the age of 50 will be required to pay a basic premium of Rs 17,782 and a GST value of Rs 3,200. It will cost Rs 20,983 for the entire premium. Remember that the Tax Benefit is based on current Tax Laws and is not guaranteed.
Therefore, when claiming a tax deduction under section 80D, the sum of GST paid on your insurance premiums may also be included. The total premium of Rs 9,255 or Rs 20,983 is therefore deductible in each case under section 80D. The investment limit corresponding to the specific section pertains to this tax-saving deduction amount.
Insurance is subject to the solicitation. Before making a purchase, carefully read the sales brochure or policy wording for more information on the benefits, exclusions, limits, and terms and conditions.
The advantages of tax deductions for health insurance are listed below.
It's commonly argued that investing shouldn't be done solely to reduce taxes. In the case of health insurance, which is not an investment, the premium paid not only allows you to purchase health coverage for your parents but also helps you to reduce your tax burden. Health insurance for your parents is undoubtedly beneficial in light of the escalating costs of hospitals.
Bajaj Finance and its partners provide health insurance plans designed with your needs in mind. Individuals, families, and senior citizens can choose from various health insurance plans from Bajaj Finserv Health to get the right coverage.
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