When it comes to buying health insurance, we Indian find another easy to save on taxes. Although investing in health insurance plans is one of the easiest ways to get a rebate on income tax under section 80D, it is not always recommended to invest in insurance plans to saves thousands on taxes.Needless to say, health insurance like life insurance saves you thousands or even lakhs in medical emergencies. Based on the coverage offered by your policy, you can avail free-of-cost treatment at a hospital of your choice irrespective of whether the hospital is in the list of the network of hospitals provided by your insurer.
For instance, if you avail treatment at a nearby hospital in a hurry, you still have the option to get reimbursement for medical expenses incurred for the same. This does require you bear some sort of formalities like submitting medical bills, doctor certificate, hospital discharge papers etc. to your insurer. In contrast, if you need to get hospitalized anytime soon, better inform your insurer to avoid any extra overhead in the future. Once you inform your insurer, youdo not have to worry about hospitalization and its corresponding expenses. Your insurer or third-party administrator (TPA)will take care of the formalities with the hospital. Let us take a real-time scenario below:
You have, in your relatives, two families in which every individual has health insurance while the other one has none with health insurance policies in their names. Now, analyze the medical expense borne by both the families in the last year. You will get to see a significant difference between the expensesheets prepared for both the families. The family with health insurance plans had to bear minimum expenses on their own, whereas the other family had to bearall their medical bills and supporting expenses on their own.
Income Tax Benefits
Talking about income tax benefits health insurance policies provide you highlights section 80D. As per the section 80D, the premiums you pay towards a health insurance policy are tax-free. In other words, you can avail benefit up to Rs. 25, 000 if your age is below 60 years. In case you are paying premiums for your parents as well as for self, then the maximum benefit you can avail goes up to Rs. 55, 000 (i.e. Rs. 25, 000 for self + Rs. 30, 000 for your parents).
Beyond Tax Benefit
Imagine the breadwinner of your family falls sick for two weeks and there is no other source of income available to you. You have to spend a large share of your savings on medical expenses and you have no interim income to manage your everyday expenses. On the other hand, if you have a health insurance policy in your name, you do not have to worry about the expenses arising out of the treatment. Go for the best health insurance policy to save thousands on medical expenses, as you can avail treatment at any hospital of your choice.
Remember, the premiums you pay towards health insurance are subject to the coverage offered by the policy availed.Needless to say, the larger the coverage offered the higher the premium payable towards the policy.