How To Select the Right Health Insurance Policy That Helps Reduce Taxes

Instead of only being seen as an extra layer of financial protection for a medical crisis, health insurance is also a means of tax deduction.

Picking the ideal health insurance policy not only guarantees good medical services for you and your family, but it also helps you claim substantial tax exemptions under Sec 80D of the Income Tax Act.

The increasing prices of healthcare and the unpredictability of needed treatment make it more important than ever to obtain the best health insurance policies that will provide you with added tax benefits during filing. This article discusses the need to carefully choose the best health insurance policy especially when it comes to the scope of coverage and tax benefits.

Clarification of Section 80D: Tax Deductions for Health Insurance

According to the Income Tax Act, under Section 80D, an individual can claim tax deduction on health insurance premium for himself or members of his family.

Payment eligible as deduction under Section 80 D:

• Self, Spouse and Dependents: When a policyholder reaches the annual limit of ₹25,000 under health insurance premiums, they can claim their spouse and children as dependents under the policy.
• Parents: Taking care of aged, non-income elderly parents for whom there is a deduction of up to ₹50,000 if they are senior citizens. For non-senior citizens, the deduction amount available is instead ₹25,000.
• Preventive Care: Then there is the set maximum goal which is 5,000 that can be used if claimed for preventive check-ups.

Maximum Deduction Limit: Thirty-five per cent of senior citizen taxpayers who have health insurance policies can take a cumulative claim of up to ₹1,00,000 if you and your parents are senior citizens.

6 Key Factors to Consider When Choosing a Health Insurance Plan

• Comprehensive Coverage – Opt for a plan covering hospitalization, pre- and post-medical expenses, daycare procedures, ambulance services, and critical illnesses with minimal restrictions.
• Right Sum Insured – Consider family size, pre-existing conditions, and future medical costs to choose an adequate sum insured.
• Cashless Network Hospitals – Ensure your insurer has an extensive hospital network to avoid complications during emergencies.
• High Claim Settlement Ratio (CSR) – Choose an insurer with a CSR above the industry average for quick and hassle-free claim approvals.
• Family Floater Plans for Tax Benefits – A single plan covering the whole family is cost-effective and offers tax exemptions under Section 80D.
• No-Claim Bonus & Wellness Perks – Look for policies offering a no-claim bonus, premium discounts, free check-ups, and wellness rewards for added savings.

Conclusion:

It should be noted that the best health insurance policies are the ones you buy that cover all possible illnesses and provide the insured with substantial tax savings.

Constructing your health insurance in this manner allows for your finances to be more protected, reducing the tax payable on income earned set with tax allowances. Rather than treating health insurance as an expense, look at it as a way of using my finances more for my benefit and health if you haven’t done so, start looking into acquiring the best health insurance policy today to maximize your tax savings and coverage.