How Can You Plan Saving More Tax with Health Insurance?
With the onset of the pandemic, all of us have experienced how uncertain life can be. It taught us the importance of being prepared with robust financial and healthcare plans. Amongst various other types of insurance policies, health insurance shall be prioritized due to the escalating healthcare costs and an increase in the number of unexpected diseases in today’s world.
Apart from that, health insurance tax benefit is another aspect to be considered. The government provides it to encourage more people to buy health insurance. You can choose the plan that seems suitable for you, depending on the premium amount you can pay every year. As per Section 80D of the Income Tax Act, you can avail of tax benefits by taking up health insurance for yourself, your spouse, your children, and your dependent parents based on their age.
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How Does Health Insurance Tax Benefit Majorly Help In Financial Planning?
Prioritizing your Health over everything is the need of the hour. While buying health insurance, many things are taken care of together.
Standard health insurance offers several other tax benefits apart from just providing health coverage. You can avail of higher health insurance tax benefits in the following ways:
- You can increase the premium amount such that a higher amount will be eligible for a tax deduction, thus allowing you to save more tax.
- Rather than paying in cash, you can have preventive health checkups covered, which depends on the type of policy you take up and the insurer. Along with the premium amount, you can get tax deductions for these checkups.
The health insurance tax benefit is a percentage of the sum insured, and the upper limit is set in advance, as per the Income Tax Act.
- You can get your dependent parents insured as well. The premium eligible for tax benefits ranges around Rs. 25000-30000 annually. As a whole, you can save tax of around Rs. 55000-60000 as a part of the health insurance tax benefit.
- You can even avail of health insurance tax benefit on single premium insurance policies as well. In this case, you pay a lump-sum amount in a single year, and the tax benefit can be taken on the premium payable. Again, the tax savings are subject to the prevailing laws.
Few quick things which should be kept in mind before you sign up for a health insurance plan:
- Study the age should be carefully because the premium amount and the policy duration vary according to age.
- Check the waiting period clause of the insurer in advance to make a better decision.
- Go for an insurance plan that covers pre-hospitalization as well as post-hospitalization expenses.
- Check the process of claiming the insurance. A smooth process is an added advantage.
- Do check the network hospitals, i.e., all hospitals that the insurer has tie-ups with. Half of your burden of seeking the claim gets settled if you get admitted to one of the network hospitals, and you can have a cashless treatment.
Are You Investing to Avail Health Insurance Tax Benefit?
With time, you become knowledgeable about finding smarter ways to plan your financial goals. You start planning your finances from the time you start earning a decent amount of money.
Investing in health insurance should be your priority to deal with lifestyle diseases and medical inflation. As mentioned above, it also helps you save a fair amount of money by providing annual tax benefits. Many reputable insurers like Tata AIG makes the process easier and simpler for you by providing an easy settlement process and a shorter waiting period with their plans.