Explained: How Can You Save Tax With Senior Citizen Health Insurance
Why is health insurance for senior citizens required?
With the advancement of medical sciences in India, the average life expectancy of an individual has risen to seventy years. So, as one gets older, the risk of diseases increases in indirect proportion to the available money for bearing treatment expenses. Simultaneously, the retirement age factor remaining constant over the years has added to difficulties.
At such a juncture, children at the peak of their careers are expected to take care of treatment costs which are again on an upsurge owing to better benefits than before. While family budgets can go for a full 360-degree toss, all of this can be managed by opting for health insurance for senior citizens on time.
Features of health insurance for senior citizens
Major insurance companies in India have provisions for covering parents within their plans, but these usually allow a maximum of 65 years of age. In comparison, buying health insurance for senior citizens offer exclusive plans targeted solely at those 65 years and above, Click here to know more. These are some features that come in with health insurance for senior citizens:
- Guaranteed financial security
- Tax benefits under Section 80(D), Income Tax Act, 1961
- Adequately high coverage for ailments that concern 65 years and above
- Renewability offers with the timely payment of premiums
- Additional coverage like emergency ambulance, insurance for specific illnesses, and so on
- The flexibility of payment systems for treatment, ranging from cashless treatment to reimbursement
How much tax can you save from health insurance for senior citizens?
With India’s surging need for senior citizen insurance policies, individuals can now claim unbelievable tax deductions while paying the health insurance premium for their parents, spouses, and children.
Tax deduction under Section 80(D)
Under Section 80(D) of the Income Tax Act, 1961, The legal provision allows a maximum deduction of ₹25,000 annually if the individual is involved in health insurance for senior citizens plans.
Tax deduction under Section 80DDB
Further, for critical illness medical insurance plans, tax deduction has been raised to ₹1 lakh for several health insurances for senior citizens plans under Section 80DDB of the Income Tax Act, 1961. Earlier it was ₹60,000 (in the case of senior citizens) and ₹80,000 (in the case of very senior citizens).
Tax deduction for senior applicants
Earlier, the tax deduction limit for senior citizens was set at ₹30,000, but now it has been raised to ₹50,000 if the applicant is a senior citizen. So, if the individual pays a premium primarily toward senior citizens, they can claim an additional tax deduction of ₹50,000 annually. The senior citizens must be above 60 years of age in this case.
Tax deduction for family applicants
If an individual pays a health insurance premium of ₹75,000 for their family, including senior citizen parents, anything from 10%, 20%, and 30% tax rates can be saved.
Tax deduction for critical illness patients
Suppose a senior citizen pays premiums for critical illness health cover for themselves. In that case, they can save hefty sums of money under ‘indemnity’ and ‘fixed benefit’ plans of various insurance companies. While indemnity health insurance for senior citizens plans ensures the security of finances against medical charges, the fixed benefit health insurance covers both medical and non-medical expenses.
Retirement is not a big vacation as it sounds if the individual is not secured monetarily. With the exponential rise in medical costs compounded with limited availability of income after the COVID pandemic, the only guaranteed solution for taking care of senior citizens is health insurance that covers financial, medical and general expenses. India is a country with a huge population of senior citizens. Therefore, ensuring their well-being is the responsibility of every working adult. So, secure your parents’ post-retirement with reliable health insurance plans today.