Which Type of Health Insurance Policy is Ideal for You?

Which Type of Health Insurance Policy is Ideal for You?

 Which Type of Health Insurance Policy is Ideal for You?

When people decide to purchase a health insurance policy, they are often confronted with a dilemma. Because there are so many different types of medical policies available in India, they can’t make up their minds as to which kind is the most suitable. So, to help you arrive at a conclusion, here is a breakdown of the different policies and their features.

Individual Health Insurance Policies

This health insurance policy is ideal for people who live alone. Here only the policyholder is entitled to the benefits.

Its features are:

  • The minimum entry age is 18 years and the maximum age ranges from 60-80 years
  • You get a lifetime renewal facility
  • It offers extensive coverage against a host of illnesses
  • Your policy will also cover both pre and post hospitalization charges, costs of medicines, therapy, surgery, prosthetic devices, doctors’ fees and room rent etc.

 

Family Floater Plan

If you have a family and do not want to buy separate policies for all of them, you can consider the family floater plan. In terms of coverage, it is similar to the individual health insurance policy.

Its unique features are:

  • You can include your spouse, children (up to three of them), parents, in-laws, and siblings (as dependants)
  • Only one premium suffices the entire family
  • You can make an insurance claim for more than one family member simultaneously as long as the sum insured is sufficient to simultaneously cover the treatment of multiple policyholders
  • You can introduce changes in the policy to accommodate changes in your family like the birth or death of a member
  • Family insurance plans also give you child-specific benefits like bilirubin test, autism screening and hepatitis test

 

Group Health Insurance Policies

Employers utilize group health insurance policies to lure the brightest talents into their fold by including it in the employee benefits package.

Its salient features are:

  • It brings all the employees under the umbrella of one scheme
  • All employees get uniform health benefits
  • The employer has to pay only one premium
  • If an employee resigns or is laid off, she/he will no longer be able to enjoy the perks of the policy

 

Critical Illness Plans

These are special medical health insurance plans that only cover debilitating illnesses. If you come down with any of them, it can spell disaster, not just your health but your finances as well. Some of the ailments covered under this scheme are:

  • Cancer
  • Heart attack
  • Kidney failure
  • Complete or partial paralysis
  • Bacterial meningitis
  • Coma
  • Speech loss
  • End-stage liver disease

If someone in your family has any of these ailments, it raises your risk of getting them as well. In such cases, it would be wise to invest in this plan. If you want to know whether you’re genetically predisposed to a critical illness, you can consult a doctor on MediBuddy.

The features of a critical illness plan are:

  • There is a waiting period of three months
  • You do not need to be hospitalized to claim the sum insured. Diagnosis alone would do
  • There are no clauses that specify that you need to utilize the sum insured for your treatment. You can use the money in any way you choose to

How well you’ll be able to utilize the benefits of your health scheme depends on whether you make the right choice. So identify your requirements and see which type of policy best fits the bill.

Looking to understand any pre-existing medical conditions before you opt
for health insurance cover? Look no further than MediBuddy for a wide-range
of health checks and consultations at your closest healthcare centers.

 

Need of health insurance

Health Insurance 101: Understanding The Need and Impact

 

Healthcare in India is still unaffordable for many. Health financing has been around for some time now, and its wheels are turning, but is India buying?

Not really. According to the National Health Profile, only 27% (or roughly 35 crores) Indians own health policy. In other words, almost 100 crores are uninsured. Healthcare costs can swiftly exceed the savings and the average income of families, in which case a policy can act as a safety net. But as is the case with health insurance, people usually get confused when it comes to understanding their own needs and choosing a policy that provides the best cover. This infographic delves into the ABCs of a health insurance: the right time to get one, the types of policies, and more so that you invest in your health now by choosing the right plan.

Health Insurance Need and Impact

Parenting in urban world

White Paper: Parenting In The Modern World

Parenting in urban world

This whitepaper captures the ups and downs of new parents in urban India. New parents move mountains to take care of their baby, but they don’t take care of themselves the same way. Balancing self-care and childcare is an art that new parents need to learn. Find out about the current trends in parenting, how social media is having an impact on parenting and more!

tax saving section 80DDB

Let Your Elderly Parents’ Medical Billing Help You Save Taxes

tax saving section 80DDB benefits

Health insurance policies- either individual, family floater or for our elderly parents, are always a boon. Not just because they take care of all the medical payments at the time of a health scare but also because they help you save taxes. Section 80C of the Income Tax Act does not consider the sum insured we receive from an insurance policy as an income.

Despite that, many senior citizens do not own a health insurance policy. This is because insurers charge a hefty premium for coverage extended to the elderly. The rationale being- since they are no longer in their prime, they are more prone to illness than others and many cannot afford to pay such a high price.

Moreover, if they already suffer from one ailment or another at the time of purchase, insurance companies may even refuse to sell policies to them. This leaves senior citizens with no option but to spend money from their own pockets when a medical emergency arises.

In this bleak scenario, Budget 2018 brought a breather for people aged 60 years or above who do not have a health insurance policy and are suffering from an illness that is draining their savings.  To this effect, it has amended Section 80 D and introduced Section 80 DDB.

What is Section 80 DDB?

This section makes provisions for tax deduction on expenses arising out of the medical treatment of specific illnesses. Only individuals (and not corporates or firms) are entitled to the tax deductions.

You can avail benefits if you:

  • Are a member of a Hindu Undivided Family
  • Have been a resident of India during the last financial year (Non-resident Indians are not eligible to deductions).
  • Are not covered by any medical policy
  • Have spent money for the treatment of a dependant (spouse, children, senior citizen parents or siblings)

 

Who is eligible for tax deduction?

This section explicitly states that only those who are actually incurring expenses can make a claim. So, if you are a senior citizen and are bearing the cost of treatment yourself, then you can avail these tax benefits. But, if your children are paying for your treatment, then, they need to claim the deduction.

What does the Tax Deduction cover?

There is no clear definition of ‘medical expenditure’ in the Income Tax Act. Tax deduction for super senior citizens (aged 80 years or more) was introduced in 2015. Senior citizens were brought into the fold in 2018. For them, medical expenses can mean anything from doctor’s consultation fees, medicines, therapy, hearing aids or a pair of spectacles. All these expenses are entitled to a deduction.

Section 80 DDB also includes certain illnesses, the treatment of which merits deduction:

  • Neurological ailments
  • Malignant cancers
  • AIDS
  • Chronic Kidney Failure
  • Haematological ailments like thalassemia and haemophilia.

 

What documents do you need to produce?

You simply need a prescription/certificate from a doctor with the relevant medical degree specializing in the ailment you have been diagnosed with. Before 2016, only a prescription from a doctor practising in a government hospital was accepted. Since then, the rule has been relaxed, allowing private practitioners too.

The prescription should clearly state:

  • The name of the patient
  • Age
  • Type of illness
  • Name, address and registration number of the specialist
  • Name and address of the hospital if the government sponsors it

Remember to keep at hand documents like identity proof, medical invoice etc.

How will you file for a tax deduction?

To claim tax benefits under Section 80 DDB, you need to procure Form 10-I. The form should contain:

  • The applicant’s name
  • Address and name of applicant’s father
  • If the applicant is a dependant, then the name and address of the person providing
  • The name of the disease
  • The registration number and the name of the doctor you are consulting
  • Signature of the applicant

 

How much money can you claim as Deduction under Section 80 DDB?

The amount that is deducted from your taxable income as health care expenses, hinges solely on the age of the person who needs the medical treatment. Here are the deductions and their corresponding age limits from the revised tax deduction rules –

  • People who are less than 40 years old –          INR 40,000
  • Senior citizens aged above 60 years-              INR 100,000
  • Super senior citizens above 80 years of age – INR 100,000

Previously super senior and senior citizens used to receive INR 80,000 and INR 60,000 as tax deduction, respectively. The revised tax deduction rules will come into effect from 1st April 2019.

Also, remember that you can only make a claim if you can prove that you have made payments through banking channels like net banking, debit or credit cards, cheques, through UPI or E-wallets.

What if a group health insurance policy covers your parents?

Often working professionals include their elderly parents in a group health insurance policy provided by the employer. In that case, are senior citizen parents still eligible for tax deduction?

One of the conditions for claiming tax deductions is that no health insurance policy covers the person. So, even if it is your employer and not you who pays the premium, your parents will be under an insurance umbrella and that would disqualify them from receiving these tax benefits.

What about Preventive Health Care Deduction?

Section 80D also lets you claim a tax deduction of up to INR 5000 for a regular OPD preventive health care check-up. It has nothing to do with provisions of section 80 DDB. Claiming one does not bar you from the other.

An annual preventive health check can do wonders for your health. With the bonus of tax deductions under Section 80DDB, there’s absolutely no reason to postpone your annual health screening anymore!