Many myths prevail in air when it comes to finance and insurance related matters. One of the main reasons for such misunderstanding is the lack of complete knowledge about the financial and insurance products concerned. Educating the investors in the appropriate manner about financial products will make them take prudent decisions in a timely manner. Medical Insurance is one such product that is understood as ‘Medical coverage when we fall sick”. Medical Insurance, in reality, is more than this. Let us understand the complete facts about Medical Insurance and the benefits it offers towards tax savings.
- Premium paid towards Medical Insurance can be considered for deduction from your overall income for the year
- Medical Insurance coverage offered to your spouse, children and parents are eligible for Income tax deduction
- A maximum of Rs. 25,000/- can be claimed as deduction during a fiscal year (1st April of the current year to 31st March of the next year) for people who does not fall under the Senior Citizens category
- Senior citizens can claim a maximum of Rs. 30,000/- as deduction during a fiscal year (1st April of the current year to 31st March of the next year)
- Deduction can be claimed for premium paid towards Health coverage of parents even if they are not your dependents directly
Key facts about Medical Insurance
Given below are some precautions to be taken care when you go in for Medical Insurance for you and your family.
- Ensure you do a detailed research about the different kinds of Medical Insurance products available before you really go in for one
- Take into consideration factors like the medical conditions that prevail in your family members, list of hospitals that offer medical coverage under the policy, the cost and the payment options provided by the Insurance companies.
- Look out for the availability of cashless option in Hospitals associated with the Insurance service provider. Cashless options ensure that you do not shell out any money from your pocket at the time of medical emergencies. Cashless facility makes the hospital accumulate the total cost incurred in treatment right from the first day till discharge. The hospital will adjust the maximum amount in your Insurance coverage and only a portion of the total cost incurred will be taken as cash component which is usually very meagre.
- In cases where you bear the complete expenses initially making the payments out of your pocket, then the same will be reimbursed by the Insurance Company. Such reimbursement is totally tax free and exempted by tax in a complete manner.
- Medical Insurance Policies are just for covering expenses in case of health issues and no maturity value is attached to them
In the same wave length, when an Employer pays premium towards Accident Cover for his Employee as a part of salary package, the same is exempted from tax. Neither the Employee not the Employer is liable to pay tax towards such Accident Cover premium.