Choose Health Insurance with Low Premiums and Save More on Taxes

Posted on: Feb 28, 2024 | 3 mins | Written by: HDFC ERGO Team

Choose Health Insurance with Low Premiums and Save More on Taxes

How Health Insurance with Lower Premiums Help You Save More?

In today’s times, when health issues and healthcare costs are increasing by the day, health insurance is considered an important part of financial planning. A comprehensive health plan can cover a range of medical expenses and keep your savings intact. From hospital bills and daycare procedures to AYUSH treatments and home healthcare bills, a healthcare plan covers them all. If you see health insurance premiums as an additional financial burden, you can choose a policy with low premiums. Moreover, you can claim annual tax deductions on the premiums you pay toward your health plan. Read on to learn how health insurance with lower premiums can help you save more on taxes.

Tax deductions offered on health insurance premiums

Under Section 80D of the Income Tax Act (1961), taxpayers in India can claim deductions of up to INR 1 lakh on health insurance premiums paid for themselves, their family and their dependent parents. The following table will help you understand this better:

Health insurance policyholders	Deductions on Policy Premiums	Total Deduction
Self and family (all below 60 years of age)	INR 25,000	INR 25,000
Self, family and parents (all below 60 years of age)	INR 25,000 (self and family) + INR 25,000 (parents)	INR 50,000
Self and family (below 60 years) and parents (senior citizens)	INR 25,000 (self and family) + INR 50,000 (parents)	INR 75,000
Self, family and parents (all above 60 years of age)	INR 50,000 (self and family) + INR 50,000 (parents)	INR 1,00,000

Therefore, if you pay health insurance premiums for your parents, you can claim additional tax deductions and save more.

How health insurance with lower premiums can help you save more

There are two ways how health insurance with lower premiums can help you save more:

1. Tax benefits

Suppose you buy a health insurance policy for yourself and your family, and all members are below 60 years of age. The premium of your healthcare plan is INR 20,000 annually. Since you can claim tax deductions of up to INR 25,000 on health insurance premiums, the same will not pinch your pocket.

2. Medical bills

When you buy health insurance with lower premiums, the insurer will cover your hospital bills and other associated expenses. Therefore, you won’t have to worry about paying the same out of pocket unless the sum insured by your health plan is lower than your medical bills in the given financial year.

Tips to choose a health insurance plan with low premiums

If you are looking for ways to get health insurance with lower premiums, the following tips can help.

1. Compare multiple health plans

Shortlist some reputed insurance providers in your region and compare the health plans they offer. You can then choose a policy offering adequate coverage at affordable premiums.

2. Buy health insurance early in life

If you buy health insurance when you are young and healthy, the premiums will be on the lower side. Even if premiums increase at the time of policy renewal, the hike will be marginal.

3. Choose an adequate sum insured

Keep your health and budget in mind and choose an adequate sum insured accordingly. The higher the sum insured by your health plan, the higher will be the policy premiums.

4. Opt for a family floater

Family health insurance can cover all family members under one plan. The policy coverage is shared equally by the covered members. The premium of this health plan is more affordable when compared to that of individual health insurance policies.

5. Select add-on covers wisely

If you choose add-on covers, select only the important ones. Every add-on cover will increase the premium of your health plan.

6. Opt for co-payment or deductibles

This is a smart way to reduce health insurance premiums. Co-payment means paying the pre-decided percentage of your medical bills when you file a health insurance claim. The deductible is the fixed amount you must pay before the insurer covers your medical bills. Both co-payments and deductibles reduce the liability of insurance companies. Therefore, health plans with these clauses are on the affordable side.

7. Choose health insurance offering no-claim bonus benefits

Look for a health plan with the no-claim bonus option. This simply means that if you don’t raise a claim during a policy period, the insurer will give you a no-claim bonus in the form of an increased sum insured or reduced policy premiums. This can help you save more.

Conclusion

Health insurance is a significant investment that can cover medical bills and reduce tax liabilities. Therefore, if you and your loved ones are not covered under a healthcare plan, you must opt for individual health insurance , family floater or a senior citizen’s health plan without delay. If you are a taxpayer in India, you can claim deductions on health insurance premiums. This way, the policy premium will not create an additional financial burden, and you can opt for quality treatment without paying the bills from your savings.

Disclaimer: The above information is for illustrative purposes only. For more details, please refer to policy wordings and prospectus before concluding the sales.

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