How to Buy Health Insurance for Your Parents and Maximise Tax Savings

Ensuring the health and well-being of your parents is a priority, and one of the best ways to do so is by purchasing health insurance for them. Not only does this provide financial security during medical emergencies, but it also offers significant tax benefits. This article will guide you through the process of selecting the suitable health insurance plans for your parents and maximising your tax savings.

Understanding the need of health insurance for parents

As your parents age, the likelihood of medical issues increases, making it essential to have a robust health insurance plan in place. Parents health insurance covers a wide range of medical expenses, including hospitalisation, surgeries, and medications, ensuring that your parents receive the best possible care without putting a financial strain on your family.

Benefits of Parents' Health Insurance

• Financial protection: Covers high medical costs, reducing out-of-pocket expenses.
• Access to quality healthcare: Ensures that your parents can access the best medical facilities and treatments.
• Peace of mind: Provides security and peace of mind knowing that medical emergencies are financially covered.

Choosing the right Health Insurance Plans

When selecting health insurance plans for your parents, consider the following factors to ensure comprehensive coverage and maximum benefits:

• Coverage

Look for plans that offer extensive coverage, including hospitalisation, pre- and post-hospitalisation expenses, day-care procedures, and critical illnesses. Ensure that the plan covers pre-existing conditions, as older adults are more likely to have ongoing health issues.

• Sum Insured

Choose a plan with an adequate sum insured to cover potential medical expenses. Given the high cost of healthcare, it is advisable to opt for a higher sum insured to ensure sufficient coverage.

• Premiums

Compare premiums of different health insurance plans. While it's important to find an affordable option, make sure the plan provides adequate coverage. Remember that higher premiums often mean better coverage and lower out-of-pocket expenses during a medical emergency.

• Network Hospitals

Check the list of network hospitals associated with the insurance provider. Ensure that reputable hospitals and those close to your residence are included in the network for convenience and better healthcare options.

• Co-Payment and Deductibles

Understand the copayment and deductible clauses in the policy. Co-payment is the percentage of the claim amount that you need to pay, while deductibles are the amount you must pay before the insurance kicks in. Lower copayment and deductible amounts are preferable for reducing out-of-pocket expenses.

• Claim Settlement Ratio

Review the claim settlement ratio of the insurance provider. A higher ratio indicates a better track record of approving claims, which is crucial for hassle-free claim processing during emergencies.

Maximising Tax Savings with Health Insurance for parents

Getting a health insurance for parents not only secures their health but also offers significant tax benefits under the Income Tax Act.

Section 80D Deductions

Under Section 80D of the Income Tax Act, you can claim deductions for the premiums paid towards health insurance plans for your parents. The deduction limits are as follows:

• For Parents Below 60 Years: You can claim a deduction of up to Rs. 25,000 per year.
• For Senior Citizen Parents (60 Years and Above): You can claim a deduction of up to Rs. 50,000 per year.

If you are paying premiums for both yourself, your family, and your senior citizen parents, you can claim a total deduction of up to Rs. 75,000 (Rs. 25,000 for self and family + Rs. 50,000 for senior citizen parents).

Preventive Health Check-up

Expenses for preventive health check-ups are also eligible for tax deductions under Section 80D, up to a limit of Rs. 5,000 within the overall limit. This encourages regular health assessments, ensuring early detection and treatment of health issues.

Health Insurance for Parents with Critical Illnesses

If your parents have pre-existing critical illnesses, consider specialised health insurance plans that cover these conditions. While premiums for such plans may be higher, the comprehensive coverage and tax benefits make them a worthwhile investment.

How to Apply for Parents Health Insurance

• Assess Their Health Needs

Evaluate your parents' health status and medical history to choose a plan that best meets their needs. Consider their age, existing health conditions, and potential health risks.

• Compare Plans

Use online comparison tools to compare different health insurance plans. Look at the coverage details, sum insured, premiums, network hospitals, and claim settlement ratios to make an informed decision.

• Read the Fine Print

Carefully read the policy documents to understand the terms and conditions, including exclusions, waiting periods, co-payment clauses, and claim procedures. Ensure there are no hidden terms that could affect the coverage.

• Consult an Insurance Advisor

If you are unsure about which plan to choose, consult an insurance advisor. They can provide personalised recommendations based on your parents' health needs and your financial situation.

• Complete the Application Process

Once you have selected a plan, complete the application process by providing the necessary documents, including identity proof, age proof, and medical reports if required. Pay the premium to activate the policy.

Conclusion

Getting health insurance for parents is a crucial step in ensuring their well-being and financial security. By choosing the right health insurance plans, you can provide your parents with access to quality healthcare.. Evaluate their health needs, compare plans, and make an informed decision to secure the most suitable coverage for your parents. Proper planning and management of health insurance not only safeguard your parents' health but also offer significant financial benefits, giving you peace of mind and financial stability.

Disclaimer: T&C Apply. Bajaj Finance Limited (‘BFL’) is a registered corporate agent of third party insurance products of Bajaj Allianz Life Insurance Company Limited, HDFC Life Insurance Company Limited, Future Generali Life Insurance Company Limited, Bajaj Allianz General Insurance Company Limited, SBI General Insurance Company Limited, ACKO General Insurance Limited, ICICI Lombard General Insurance Company Limited, HDFC ERGO General Insurance Company Limited, Tata AIG General Insurance Company Limited, The New India Assurance Company Limited, Cholamandalum MS General Insurance Company Limited, Niva Bupa Health Insurance Company Limited , Aditya Birla Health Insurance Company Limited, Manipal Cigna Health Insurance Company Limited and Care Health Insurance Company Limited under the IRDAI composite CA registration number CA0101. Please note that, BFL does not underwrite the risk or act as an insurer. Your purchase of an insurance product is purely on a voluntary basis after your exercise of an independent due diligence on the suitability, viability of any insurance product. Any decision to purchase insurance product is solely at your own risk and responsibility and BFL shall not be liable for any loss or damage that any person may suffer, whether directly or indirectly. Please refer insurer's website for Policy Wordings. For more details on risk factors, terms and conditions and exclusions please read the product sales brochure, policy wording carefully before concluding a sale. Tax benefits applicable if any, will be as per the prevailing tax laws. Tax laws are subject to change. BFL does NOT provide Tax/Investment advisory services. Please consult your advisors before proceeding to purchase an insurance product. URN No. BFL/Advt./23-24/388

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