Section 80D Benefit for Mediclaim, Health Insurance

In Continuation of my last topic on Medical Insurance, I would also like to highlight the Income Tax Benefits associated by keeping yourself insured. Yes, the Income Tax allows benefits under the section 80D of the Income Tax Act 1961(Of course this keeps updating as when the amendments are approved). This benefit is over and above the benefits provided under the Section 80C(Which is where we park all other insurances and PF benefits etc).

So What is 80D?

The Burden of buying an Insurance Policy i.e. paying the premium of the insurance policy can be saved and filed under Section 80D for deduction related to buying the Mediclaim policy. The Benefit further extends to your parents as well, hence apart from your own insurance, if you take insurance for your parents, the premium paid in this respect is also claimable as a deduction.

What Are the various Benefits available under the section 80D?

• For Individuals below 60 Years it is 15000 INR
• For Individuals above 60 Years it is 20000 INR
• In addition to the above you can also claim benefit for your parents 
• For Parents Below 60 Years the benefit is 15000 INR
• For Parents Above 60 Years the benefit is 20000 INR 

For Example - if you are below 60 Years of age and your parents above 60 Years of age, your total benefit in lieu of the premium paid is 35000 INR(within the above mentioned limts) i.e 15000 INR for yourself, your spouse and your children and 20000 INR for your Parents.

Any Additional Benefits?

Apart from the above, a deduction of 5000 INR is allowed for payment of Preventive Health Check up for yourself, your dependents like spouse, children and Parents. Now this benefit is not over and above the benefit listed above but is included in the above deduction. 

For Example - If you are paying premium for yourself 10000 INR and for your parents above 60 Years of age 20000 INR, you can claim an additional deduction of 5000 INR for any Preventive Health Check up done during the year for yourself or your parents that your paid for but the total should not exceed the total of 35000 INR (As in the above example). The deduction is not per person but in Total for all.

of either the individual himself or his family members which includes spouse, parents and dependent children. - See more at: http://taxguru.in/income-tax/section-80d-deduction-premium-paid-medical-insurance.html#sthash.fJ1IjxMf.dpuf

of either the individual himself or his family members which includes spouse, parents and dependent children. - See more at: http://taxguru.in/income-tax/section-80d-deduction-premium-paid-medical-insurance.html#sthash.fJ1IjxMf.dpuf

of either the individual himself or his family members which includes spouse, parents and dependent children. - See more at: http://taxguru.in/income-tax/section-80d-deduction-premium-paid-medical-insurance.html#sthash.fJ1IjxMf.dpuf

of either the individual himself or his family members which includes spouse, parents and dependent children. - See more at: http://taxguru.in/income-tax/section-80d-deduction-premium-paid-medical-insurance.html#sthash.fJ1IjxMf.dpuf

of either the individual himself or his family members which includes spouse, parents and dependent children. - See more at: http://taxguru.in/income-tax/section-80d-deduction-premium-paid-medical-insurance.html#sthash.fJ1IjxMf.dpuf

of either the individual himself or his family members which includes spouse, parents and dependent children. - See more at: http://taxguru.in/income-tax/section-80d-deduction-premium-paid-medical-insurance.html#sthash.fJ1IjxMf.dpuf

of either the individual himself or his family members which includes spouse, parents and dependent children. - See more at: http://taxguru.in/income-tax/section-80d-deduction-premium-paid-medical-insurance.html#sthash.fJ1IjxMf.dpuf

of either the individual himself or his family members which includes spouse, parents and dependent children. - See more at: http://taxguru.in/income-tax/section-80d-deduction-premium-paid-medical-insurance.html#sthash.fJ1IjxMf.dpuf

Personal Medical Insurance

Medical Insurance, most of us working class feel this is the duty of our employer to provide and some lucky people also get medical Insurance cover of their parents provided by their employer and some people have to pay to the employer to cover their parents. But that's about it, that's all what we think is sufficient to cover all our needs related to Medical Insurance. 

IS IT?

How much does your employer cover under Medical Insurance? 

If you are in the government services, quiet a significant amount is covered but all those in the private sector have limitation imposed on them which is mostly floater policies covering the family for anywhere between 2 to 10 Lakhs depending on your position and the employer.

Is it Enough?

A normal procedure in an good reputed hospital can cost you anywhere between 50000 to an unlimited amount and god forbid if any member of your family meets with an emergency and you have to bear the expense for the remaining amount, will you be able to bear the need over and above your normal cover, in case you have it.

Are all Hospitals in your area covered by the insurer provided by your Employer?

Do i need say more, have you even scanned through the list of all the Cashless Claim Hospitals in your area, do you think the important ones are covered or are their some Gaps, what about the list of hospitals in your hometown in case you need it there. 

What if you change the Employer, are you sure he will have the same coverage as the one provided currently by your existing employer?

Do you plan to change your employer in the near or far future, what if the employer is a good paymaster or is closer to your home but does not have any insurance coverage or very low insurance coverage, do you think you can still live with this.

I have a suggestion, do look carefully in whats covered and whats not and don't treat Medical Insurance as just another tax saving vehicle, assess your needs and coverage requirements carefully.

I would suggest apart from the insurance of the Employer, each person should also buy atleast one additional Policy or at a minimum a Top-Up plan for the medical Coverage on your own. 

Just to give you some of the benefits of an additional Mediclaim Insurance Policy - 

1. You can Choose a provider and cover your family for any additional Risks.
2. In case you are admitted to an hospital and you have an employer provided policy of 2 Lakh Rupees and your bill is 2.5 Lakh Rupees, you can always claim the remaining amount from your personal policy, this is possible in India and hence reduce the burden on your self.
3. Your Personal Policy can last beyond your Employer i.e - 
1. What if your employer changes policy and ceases to provide Medical Coverage?
2. What if your New Employer does not provide any medical Insurance?
3. What if the Employer Insurance does not cover the specific Hospital recommended by your doctor?
4. There is a less likely chance of you getting medical insurance in the later year that earlier, the earlier you take the better?

What is Top Up Plan i mentioned Above - 

Unlike mediclaim policies, top-up plans have a limit only above which you can claim also know as the Threshold Limit or Deductible amount. When you buy such a plan, you have to choose what deductible amount or threshold limit you want to apply, which is usually the amount your existing policy can cover. For example - 

If the mediclaim policy provided by your employer is for 2 lakh INR and you get admitted in a hospital for a procedure and your bill is for 4 lakh INR, you would normally have to pay from your pocket but in case you had a topup cover of say 5 lakh INR, than you would have 2 lakh INR as a threshold or deductible limit that would be paid by your Employers or your Mediclaim Policy and and the remaining 2 Lakh INR would be paid by the top-up Policy. In case, you did not have a base policy, you would have to bear the 2 lakh INR bill and top-up policy would cover the amount beyond that.

So to Sum it up, please do seriously think about the Medical Insurance needs, which is in today's world a more likely Risk.