Ideal Cover for Health Insurance
Ideal Cover for Health Insurance:
The cost of Health Insurance depends on the sum assured, age, current health condition and your previous medical history. The premium will be high if the sum assured is high. So what should be the ideal health insurance cover requirement? There is no standard answer for this. If health insurance is important, one has to look at one’s own lifestyle, health condition, age, family history of illnesses and affordability. Most insurance companies limit the sum assured to a maximum of Rs. 5 lakhs. Many health insurance policies “provide additional benefits” such as daily allowance, ambulance charges, etc. for hospitalization which are superfluous and a high premium should be paid for this. Hence avoid such plans and take something simple and basic.
Health Insurance Provided By the Employer:
Many employers provide health cover for their employees. There are 3 aspects which need to be considered in such a case – Is that cover sufficient? Is the insurer good enough? What happens if you change your job? Health insurance is provided as perk to the employees. So understand the policy in detail and check for coverage. Ask the HR Department for policy details. Get into details and find out what is covered and what is not covered. Often employees just think that the employer has given them health insurance and are relaxed. Later they find out that it does not cover A and covers B only upto a limit, which can be a painful situation.
Health Insurance for the Aged:
Health insurance companies were reluctant to provide cover for the aged till a few years back. But these days, a lot of insurance companies are providing policies for senior citizens. Additional tax exemption of up to Rs.20,000/- is provided for the insurance cover paid for a person of age 65 years and above. But the senior citizens have to pay high premium rates. For the employed, another option is to approach the employer to negotiate with the official insurer to provide an option for additional cover to parents. Since the volumes are high, the insurer can provide such added cover at attractive premium rates.
Tax Exemption from Health Insurance Premiums:
Sec 80D covers Health Insurance. You can get exemptions of:
- Upto Rs. 15,000 paid for self + spouse + children.
- Upto Rs 15,000 paid for Parents (Rs 20,000 if parents are senior citizens)
So in total if you pay your health insurance and your parents’ health insurance premiums, you can save upto maximum of Rs.35,000/-.
Note: If you take Health Insurance riders with Term Insurance like Critical Illness cover, the extra premium paid for that will actually be covered under Sec 80D and not under Sec 80C.
