Senior Citizen Health Insurance: How To Maximise Income Tax Deduction

In the post-Covid world, it is absolutely essential to have health insurance. This is the highest form of security one could have. This protection becomes even more indispensable once you are nearing old age or above 60. In that case, you would need to protect yourself and your parents, who, in case they are alive, are now super-senior citizens. 
 
The risks of unexpected health issues increase with age. Moreover, thanks to rising medical inflation, you would have to be careful while choosing or upgrading health insurance for senior citizens. In this context, when you do take cover for senior citizens, this is how you could maximize your health insurance deduction: 
 
As per Section 80D of the Income Tax Act, 1961, eligible taxpayers can avail of a tax deduction on the total premium paid towards health insurance for themselves, their spouse, children, and their parents. This deduction is available to them on their base health insurance policy premiums and the premiums paid for the top-up and critical illness plans. 
 
Explains Bhabatosh Mishra, director underwriting, products and claims, Niva Bupa Health Insurance: “An individual can claim a deduction of up to Rs 25,000 for the insurance of self, spouse, and dependent children if he is below 60 years of age and up to Rs 50,000 if he and his spouse are over 60 years of age. An additional deduction for parents’ insurance is available up to Rs 25,000 if they are less than 60 years of age, or Rs 50,000 if parents are above 60.”  
 
“While it is a must to have proper health insurance cover for everyone in your family, the deductions can also act as efficient tax-saving tools. Having said that, only tax saving purposes should not be the only criteria for buying health insurance plans,” adds Rakesh Goyal, director, Probus Insurance, an insurtech broking company. 
 
To optimally secure themselves, individuals can opt for higher sum insured plans and additional top-up plans that adequately care for their healthcare needs. This will also allow them to avail of maximum deduction up to the specified limit, depending on their age.
 
Here are the various layers to be considered- If you take just for yourself (under 60), yourself and parents, yourself (over 60), and parents (over 60-80).  
 
The healthcare requirement is different for someone young compared to those who are elderly. The health insurance plan that one opts for should consider this and provide benefits and features that one would find useful.
 
If the individual and parents are below 60, one can claim a maximum deduction of Rs 50,000. If the Individual and family are less than 60 years of age, but the parents are over 60, then the individual can claim a maximum deduction of Rs 75,000. If both individual and the parents are over 60 years of age, then the maximum deduction one can avail of is Rs 1 lakh. 
 
“Health insurance is one of the most potent tools to safeguard one’s health and hence to improve the healthcare access and encourage more people to opt for a health insurance plan with the adequate sum insured for themselves and their elderly parents, we urge the government to consider increasing the limit of tax deductions under Section 80D,” adds Mishra.