Multiple diseases associated with old age are often exceedingly costly to treat and care for. After the age of 60, the body might begin to weaken and become more prone to ailments and illnesses. The need for health insurance is thus paramount for senior citizens.
Senior citizen health insurance covers the elderly’s medical expenses. Like a standard medi-claim policy, a senior health insurance policy pays for unforeseen medical costs associated with hospitalization, health checks, day care treatments, and critical illnesses.
In light of these factors, the government has provided senior citizens with several privileges. One of the most prominent instances is the discount or rebate granted on the tax they are required to pay. In this article, we will look at the tax savings senior citizens have access to when they choose a health insurance plan.
What are Senior Citizen Health Insurance Plans?
A senior citizen health insurance plan is a form of health insurance that provides coverage for medical costs incurred by those over the age of 60. It offers preventative health check-ups for senior citizens and a cashless hospitalisation facility at the insurance providers’ network hospitals. Pre-existing conditions, hospital bills, critical illnesses, pre-, and post-hospitalisation costs, and coronavirus treatment are all covered under the policy.
The Tax Benefits Available to Senior Citizens
As per Section 80D of the Income Tax Act, policyholders aged 60 years or above are eligible for an annual tax deduction of up to Rs. 50,000 when they claim hospital bills.
If both spouses are above 60, an additional deduction of up to 50,000 may be claimed. If the policyholder and his/her parents are also over 60, the maximum deduction available under Section 80D is Rs. 1 lakh.
People over 80 who do not have health insurance are also eligible for a deduction of up to Rs. 50,000 for medical treatments and health screenings.
Tax Deductions Available Under Section 80DDB
As per Section 80DDB of the Income Tax Act, medical costs incurred for specific treatments and diseases are eligible for a tax deduction. People under 60 may get up to Rs. 40,000 annually, while the elderly (those over 80) and those over 60 can receive up to Rs. 1 lakh annually.
What Medical Expenses Qualify for Deduction Under Section 80D?
Any illness or medical expense not covered by the Income Tax Act is not qualified for a deduction as per Section 80D medical expenses; however, according to the Act’s amendments, expenses including consultation fees, hospitalisation expenses, the cost of medical equipment like pacemakers, and medications are eligible for deductions.
In addition to Section 80D of the Income Tax Act, various deductions are available under Section 80DDB. Under this clause, medical expenses for the treatment of conditions including Parkinson’s disease, AIDS, and cancer are eligible for deductions.
The maximum amount of tax deduction for those under the age of sixty is Rs. 40,000, while the maximum tax deduction for those over sixty is Rs. 1 lakh. As a result, you may be eligible for tax deductions if your medical costs are related to one of the above-mentioned conditions.
Documents Required to Claim Deduction
The Income Tax Act does not detail all the documents that must be presented in order to make a tax deduction claim. Documentary evidence should be kept, including invoices for prescription medicines, diagnostic test results, medical history records, medical bills, and more.
Other Benefits of a Senior Citizen Health Insurance Plan
A senior citizen health plan provides a myriad of benefits to the elderly. Here are some main advantages of buying senior citizen health insurance in India.
- Seasonal Ailments: Covers for treatment of any seasonal ailments, such as dengue fever, malaria, typhoid, pneumonia, and others, merely after 30 days.
- Hospitalization Costs: Senior citizen health insurance covers up to 70% of your parent’s hospital costs, just as ordinary health insurance does.
- Cashless Treatment: You don’t require a pile of cash while receiving emergency medical care or regular hospitalisation. The insurance provider pays the hospital straight from your coverage amount.
- No-Claim Bonus: With the help of this bonus, policyholders can get a reduction in their renewal premium for each year they don’t make a claim on the policy. Based on the plan type, NCB might vary from 20% to 100%.
- Pre-existing Conditions: After completion of the waiting period specified in the policy, pre-existing conditions related to the heart, lungs, kidneys, diabetes, and blood pressure are covered for treatment.
- Pre-and Post-hospitalization Costs: Most senior citizen health plans provide coverage for medical expenditures incurred before and after hospital admission. Each plan has a specific waiting period and cap on how much is covered for these costs. Many plans pay for pre-hospitalization fees for 30 days and post-hospitalization charges for 60 days, while others pay for 60 and 90 days, respectively.
- Day Care Treatments: Various health policies are available for older people to cover the costs associated with daycare procedures. In simple terms, daycare operations, unlike chemotherapy and dialysis, do not require 24 hours or longer hospitalisation.
- Home Treatment: Some senior health insurance plans provide coverage for treatment received at home. Due to this, it is simpler for senior patients to get medical care without having to endure the discomfort of traveling to the hospital if they cannot do so.
Statistics show that compared to other age groups, senior citizens need more visits to the hospital or days spent there for illnesses or ailments. Therefore, to ensure that the financial strain of healthcare is minimized, every senior person must have a health insurance policy. The government also acknowledges this need and offers tax benefits to individuals having health coverage. So, with all the tax and other benefits that come along, safeguard your future with a senior citizen health insurance plan right away!
Disclaimer: The above information is for illustrative purposes only. For more details, please refer to policy wordings and prospectus before concluding the sales.