So, with the way things are shaping up in the economy, healthcare costs are shooting through the roof, and medical bills are no joke. That’s why having a health insurance policy is more crucial than ever – for you and your loved ones. But here’s the silver lining: if you play your cards right with your health insurance, it can do more than just cover your health needs. It can actually hook you up with some pretty awesome tax benefits.
Translation? You get to trim down that hefty tax bill every year while customising your healthcare coverage to suit exactly what you need. Now, how cool is that?
What are the tax benefits you can claim for your health insurance policy?
Let’s simplify the tax talk, imagine we’re chatting over coffee. With Section 80D of the Income Tax Act, when you pay for health insurance (yours, your spouse’s, or your kids’), you can cut that amount from your taxable income. Families often go for two options – a family health insurance plan covering everyone or individual plans.
If you’re under 60, you can deduct up to INR 75,000 annually. And if you’re 60 or above, enjoy a sweet deal with a deduction of up to INR 50,000. It’s like a little bonus for taking care of your crew.
Claim deductions for your annual health check-ups
Thanks to Section 80D of the Income Tax Act, 1961, you get a nifty deal – up to INR 5,000 in extra deductions for yearly health check-ups for everyone in your family. Quick heads up, though – some policies might not cover these check-ups for the little ones, so it’s smart to double-check with your agent before locking in your health insurance.
When it’s time to claim that tax deduction, just toss in the bills from the health check-ups at a fancy NABL certified lab. Boom – you’re maximising your health plan and making sure the whole family stays on top of their health game with these yearly check-ups. It’s like a win-win – saving money and keeping everyone healthy.
Claim deductions for long term critical illness expenses
Now, under Section 80DDB, you get the green light to claim deductions for your own or your dependent’s long-term critical illness, even if it goes beyond the usual limits we talked about earlier. But here’s the catch – this only kicks in if your medical expenses for the critical illness treatment shoot past those set limits.
Usually, heavy-hitters like cancer, heart diseases, and kidney failure fall under the critical illness category. But here’s the tip – before you lock in that health insurance policy, make sure to dig into the fine print and find out the entire list of critical diseases it covers. It’s like doing a little detective work to make sure you’re covered where it really matters.
How to optimise your health policy to obtain maximum tax benefits?
- Manage your copayments and pay your premiums annually
If you are on a co-payment plan then you will be much better off calculating and understanding your deductibles under the co-payment plans to better plan your medical expenses. Thus, if you choose to plan things ahead and pay your annual premiums in advance you can budget your health expenses accordingly whilst being able to claim the premium deductibles in one go instead of it spanned over 12 months. Section 80D for the Income Tax Act 1961, permits you to claim these deductibles annually or monthly.
- Make sure to claim the annual health check-ups and always try to pre-authorise your claims
You will be smart in claiming the regular preventive health-checkups as mentioned in your healthcare policy. This would help you keep a check on health levels and requirements while making full use of the premium that you pay for your health insurance policy.
- Know the network of partner hospitals covered under your health insurance
It is recommended that you take a long look at the chain of network hospitals that fall under the cashless payment category for your health insurance policy. This will help you be aware of the hospitals that you should be going to in case a need arises. The partner hospitals will not only provide you with a better claim experience but also it will help you avoid any extra financial burden which you would have needed to claim under reimbursements otherwise.
- Identify the right plan for your needs and the value-added services
A health policy that is good for your best friend may not be the best health policy for you and your family. This is why it is always recommended to outline your health insurance requirements based on your annual income and the health insurance cover that you think is optimal for you.
You may need to consider your daily habits, if your job pertains to health risks or chances of accidents or other reasons like a pre-existing health condition for your dependent parents before you can make an informed choice of what health policy best fulfils your needs and requirements. Along with the coverage, the value added services that your policy provides can add extra value to your policy experience.
A lot of companies offering health policies offer free yoga sessions, mental health therapy sessions etc. along with their health insurance plans. Thus, you should also check on the additional health programs that you or your family can avail for a healthier life.
Your health insurance should be aimed to tackle and take care of your exact health needs and the health needs of your family. Thus, being smart with your health insurance choices can not only help you take care of your and your families’ health but it can also act as a smart tool of investment and tax saving.
Remember, the key to unlocking the full potential of your health insurance lies in planning and proactive management. By understanding the tax benefits, optimising your claims, and utilising all available services, you can turn your health insurance into a powerful financial shield.
So, don’t just see your health insurance as a safety net; wield it as a financial tool to reduce your healthcare expenses, optimise your tax benefits, and achieve peace of mind knowing you’re financially protected, both in good health and during unexpected challenges.