How Health Insurance benefits you and helps you save tax?
In today’s age of rising medical costs, having an adequate health insurance cover helps you withstand financial shocks when faced with a unforeseen medical emergency that requires hospitalization. While a majority of salaried taxpayers are covered by their employers, you need to make a prudent choice with respect to the quantum of cover available from your employer and the quantum you feel would be appropriate depending on your lifestyle and anticipated health risks.
The classic saying “Buy health insurance when you don’t need it, because you may not get it when you need it” cannot be over-emphasized in the context of when to purchase health insurance. When you are young and free of health complications, you can get a health cover at a relatively low premium. As your age increases, the corresponding premium also goes up. You also need to account for pre-existing diseases that are generally not covered during the early stages of a health cover. The cover provided by your employer would also last only for the tenure of your employment with them and you need to ensure that you have a cover even when you are out of employment.
As per the latest IRDA report for 2014-15, the total number of persons insured in India stood at 28.8 crore, which translates to approximately 24% of the total population. The penetration hence remains very low. To encourage the practice of having a health insurance cover, the government has allowed deduction of premia paid for health insurance, up to certain limits, from your taxable income.
The budget for FY2015-16 has allowed deduction of up to Rs 25,000 p.a. for premium paid towards health insurance for yourself, spouse and children. Additionally, it allows a deduction of a further Rs 25,000 p.a. for health insurance premium paid for dependent parents, which goes up to Rs 30,000 if your parents are senior citizens. You can hence claim a cumulative deduction of up to Rs 55,000 and ensure that finances are the last thing on your mind when faced with a medical emergency.
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Tax Benefits will be as per applicable tax laws. The user/investor needs to verify all the facts and circumstances with the prevailing tax statutes and seek appropriate professional advice before acting on the basis of the above information. Tax laws are subject to amendments from time to time.
Standard Chartered Bank, India having its corporate office at Crescenzo Building C-38/C-39 G Block, Bandra Kurla Complex, Bandra (East), Mumbai - 400051 is a licensed Corporate Agent of Royal Sundaram Alliance Insurance Company Limited for general insurance products and Max Bupa Health Insurance Company Limited (IRDA Registration no. 145) for standalone health insurance products vide composite license number 1096736. Insurance is the subject matter of solicitation.