The needs of senior citizens in terms of healthcare and hospitalisation are higher and different from that of a young individual. As people grow older, their immune system weakens, making them more prone to illnesses and other health disorders. This makes having a health insurance policy for senior citizens immensely important.
The benefits of a well-structured health insurance policy cannot be stressed enough. However, did you know that health insurance brings in substantial tax benefits as well, especially if the plan covers individuals over 60 years of age?
Tax deductions under Section 80D
Section 80D of the Income Tax Act, 1961, majorly contains the tax benefits that an individual can obtain by paying for their health insurance coverage. If the policyholder is paying premiums for themself, their spouse, and their children, who are all under 60 years of age, then the policyholder can claim for a maximum deduction of ₹25,000 against the premiums. If the policy is for senior citizens, that is individuals over 60 years of age, then the maximum deduction against the policy premium rises to ₹50,000.
An example would better illustrate this:
Let’s assume you pay a premium of ₹20,000 for a health insurance policy that covers your wife and your two children. You and your wife are in the 45-50 years range. You also have a separate policy for your aged parents who are 65-70 years old. The premium you pay for them is ₹35,000.
Accordingly, the tax benefits that you can enjoy with the section 80D deduction amount to Rs 55,000.*
If you or your spouse come under the category of senior citizens as well, then you can claim tax deductions up to ₹50,000 separately from the deductions for your parents. Remember tax benefit is subject to change in tax laws.*
Other health-related tax benefits that senior citizens can enjoy
- Deductions against preventive health check-ups
Preventive check-ups are especially vital for senior citizens and can help them detect serious diseases so that the treatment for the same can begin early. Thus, to encourage people to get themselves checked at least once a year, authorities have provided tax deductions up to ₹5,000 for payments made for preventive health check-ups. Note that tax benefit is subject to change in tax laws. *
- Deductions also available for critical illness insurance
If a senior citizen has a critical illness (CI) insurance policy along with their health insurance, then the premiums paid towards their CI plan are also eligible for tax deductions under Section 80D. Note that tax benefit is subject to change in tax laws. *
Major perks of health insurance for senior citizens
- Financial independence
Senior citizens are often retirees. With a health insurance policy, the retiree can rest assured that if a medical emergency were to strike, they do not have to depend on anyone else for the expenses. The sum insured from their health insurance for senior citizens policy would take care of that. *
- Extensive coverage
Whether you want coverage for AYUSH treatment, X-rays and diagnostic tests, ambulance charges, pre- and post-hospitalisation expenses, and so on, a well-designed health insurance policy will provide it. *
- Cashless treatment
Unlike earlier times, when people had to pay for the expenses and then get the reimbursement later, the cashless facility of today has eliminated the need for you to spend large amounts of cash to a great extent. Nowadays, the insurer directly deals with the hospital for the payment of the bills. *
* Standard T&C Apply
Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.