Health insurance


Health Insurance (or) Mediclaim insurance is a must-have for all. Considering the rate at which medical costs are rising, it is very important to have sufficient medical insurance coverage. The medical inflation in India is increasing at a significant rate almost 12-15 per cent every year. Therefore, it is critical to have an adequate health cover, it is even more important for senior citizens.

Absence of health insurance can wipe out your savings. Having sufficient coverage will safeguard you and your dependents from getting into financial crisis during hospitalization or critical illnesses’ treatments or accidents.

Besides medical coverage, health insurance plans can provide Tax benefits to you. The premium paid towards medical insurance is tax deductible under section 80D of the Income Tax Act, 1961.

You can claim tax deductions, provided you are paying the premium on a mediclaim policy which is in the name of

  • Yourself (and / or)
  • Your Spouse (and / or)
  • Your Parents (Parents need not be dependent on you) (and / or)
  • Dependent Children

The below revised limits are applicable for Financial Year 2018-2019 (or) Assessment Year (2019-2020) u/s 80D.

Important points on Medical insurance policies & Tax benefits

  • You can claim tax deductions on mediclaim plans provided by your employer or on policies taken by you (independent of your employment). The tax deduction is applicable on both health insurance and mediclaim policies.
  • Premium amount can not be paid in cash. Mode of payment can be anything(through credit card, net banking etc.,) except cash payment.
  • You can take medical insurance policy on your dependent children and claim tax deductions too. If they are aged above 18 years and employed then they can not be covered. Male children if not employed then they can be covered upto 25 years. Whereas, female children can be covered until she gets married (only if she is unemployed).
  • If you are paying health insurance premiums of your in-laws then you can not claim tax deductions. However your spouse can pay the premiums from her taxable income and get the tax benefits.
  • If you are paying medical insurance premiums on behalf of your sister or brother then you can not claim tax deductions.
  • Only premium amount can be claimed as a tax deduction. Do not include the service tax amount.

A word of Advice : Kindly note that having a health insurance plan is not the end of your ‘medical insurance’ planning. In fact, it is your first-line of defense only. Considering the ever-increasing medical treatment expenses in India, you have to plan for a mediclaim /family floater + Critical Illness Plan + Term, Insurance for unforeseen consequences. Don’t depend entirely on health insurance plan alone!

Tax Baniya
Health Insurance In India
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