Health Insurance is Primarily a Protection
You should never consider buying a health insurance plan for the sake of saving tax. Health insurance is a protection from unforeseen healthcare expenses which can cripple your finances. It must be primarily bought to protect your finances from any healthcare costs. Reduction in the income tax outgo in the process should be considered a bonus a nd not the principal benefit.
Section 80D of the Income Tax Act provides for tax benefit on the amount paid as premium for health insurance. The basic condition is that the premium should be paid by cheque, electronic funds transfer, or any digital medium. Payment of health insurance premium in cash disqualifies the insured from claiming tax benefit.
The tax benefit available to an individual taxpayer is when health insurance is bought for self, spouse, dependent children. A separate premium expense limit is available for individuals when health insurance is bought for parents. For Hindu Undivided Family (HUF), health insurance purchased for any member can be claimed as deduction from total income for arriving at the tax payable.
Deductions allowed from total income under Section 80D for the year 2016-17 is as follows:
For Individual
- Premium up to ₹25,000; The limit is ₹30,000 if the taxpayer insured is a senior citizen or a very senior citizen
- An additional premium of up to ₹25,000 when health insurance is purchased for parent/s of the assesses; The limit is ₹30,000 if the parent/s insured is/are senior citizen/s or very senior citizen/s
For HUF
- Premium up to ₹25,000; The limit is ₹30,000 if the member insured is a senior citizen or very senior citizen
- The additional benefit offered to individuals is not available in the case of HUF
ICICI Lombard also provides health insurance plans like Family Health Insurance , Health Booster, Arogya Sanjeevani Policy, Corona Kavach Policy, Personal Accident Insurance which offers people with the much needed financial backup during any medical emergencies.
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