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How Can I Get Maximum Benefits from My Health Insurance Policy

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You may not realize but, hectic lifestyle and sedentary jobs take a toll on your health in the long run. They have severe repercussions on the health causing to suffer from lifestyle diseases and disorders. Moreover, the rising cost of medical treatment may put a dent in your finances, if you do not have a separate fund for the same. Hence, opting for health insurance is a smart way to handle medical expenses. Not only does health insurance help you set a separate fund for your medical expenses, but also facilitate to save taxes. Let’s see how.

The Power packed Section 80D of Income Tax Act

To save taxes under Section 80D, you need to have a health insurance policy. You can reap the benefits of health insurance policy on the premium paid for self, spouse, children as well as parents, irrespective of the fact that the parents and children are dependent on you. In this case, you can avail the maximum deduction of Rs.25000 per annum, if the age of the insured is not above 60 years.

  • For senior citizens or parents above the age of 60 years, the maximum amount capped is Rs.30,000 under Section 80D.
  • If you are below the age of 60 years and your parents are above 60 years of age, you can benefit from the health insurance by maximizing your tax benefits under section 80D to a total of Rs.55,000.
  • If you are above 60 years of age, paying for the medical insurance for your parents, you are eligible for the tax benefit of Rs.60,000 under Section 80D.
Avail Tax Benefits on all Types of Health Insurance

If you want your health insurance policy to be a tax-saving instrument, you can either go for indemnity or defined benefit insurance plan. This means that apart from individual, family floater plans, you can also avail tax benefits for a critical illness plan or a daily hospitalization policy.

Go for Regular Health Check-Ups

You are entitled to get a benefit of up to Rs.5000, on preventive health check-ups. The maximum limit to earn benefits from regular check-up is Rs.25,000 or Rs.30,000, depending upon your age. Hence, if you pay a premium or Rs.20,000 towards your health insurance policy, and opt for a health check-up of Rs.5000, the total cost comes to Rs.25000, which is entitled to tax benefits under Section 80D.

Choose the Mode of Payment Wisely

To avail the tax benefits under Section 80D, you need to be smart enough to choose the mode of payment carefully. If you pay the premium through cheque, internet banking or credit card, you have the advantage to earn tax benefit on the premium paid. However, note that income tax rules do not allow tax benefit on premium paid in cash.

At the same time, preventive health check-ups, if paid in cash, can be counted for tax benefit.

Health Insurance Riders too Can Reap Benefits

If you have paid a premium towards critical illness or health insurance riders, you can claim the same to reap tax benefits under Section 80D. Hence, never hesitate to claim tax benefits for insurance riders.

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