Why Should Salaried individuals have Health Insurance Policies?
Corporate (employers) group health insurance is not a new-fangled word to people who are working in established private companies. After joining an eminent organization, every employee gets welcomed with a corporate health insurance plan from their employers. This type of policy offers additional financial and health benefits to employees and their dependents. Though a corporate health policy offers a chunk of benefits still, it has some limitations. Your cover will be terminated once you leave the organization. That’s why every salaried employee should go for an individual health policy that will make their financial portfolio robust and sturdy. Moreover, if you want to enjoy health insurance tax benefits, you should opt for individual health insurance policies.
Employers or Corporate Group Health Insurance Policy
Under any healthcare contingency, employees find it difficult to pay the entire costs of their treatments. Hence, companies step forward and embrace them with corporate group health insurance policies. After this vicious COVID-19 pandemic, IRDAI has also instructed private companies to offer employer group health policies to their employees so that every employee gets adequate coverage against various illnesses, including the COVID-19. In addition, corporate health insurance policies offer coverage to employees and their dependents if there is an accident, illness, or any health issue.
You may include your spouse, children, or even parents (by paying an additional premium) under this corporate group health insurance policy. In addition, the employers’ health insurance policy covers the cost of treatment if there is hospitalization for the employee and his/her dependents. But you need to mention the number and details of your dependents while filing the medical insurance policy.
The validity of Company Health Policy
A corporate group health insurance policy is advantageous for employees as it covers up all basic healthcare needs of employees and their dependents. But you must remember that this health insurance policy provided by the employer will be terminated once you leave the organization.
Moreover, the policy offers only basic coverage. If you want additional coverage or want to incorporate your parents into the policy, you need the extra premium amount from your pocket.
A chunk of employees these days depend on corporate group health insurance policies from their employers. But when they leave the organization, all healthcare expenses will not be covered by the policy anymore. Thus, every salaried person should purchase an individual health insurance policy to get rid of any untoward situation.
2 Main Reasons for Purchasing an Individual Health Insurance Policy
Easy Premium Payment: A salaried person is free to pay the premium health insurance policy monthly, quarterly, half-yearly, and annually at his/her convenience. An individual can even choose the tenure of the payment.
Income Tax Benefit: To enjoy health policy tax benefits, a salaried person must purchase individual health insurance. Under section 80 D medical insurance act, a salaried person can claim income tax deduction up to Rs 25,000 for medical insurance premium for self, spouse, and dependent children.
Let’s check out tax deductions for salaried employees
Under the 80 D Income Tax Act, you can make a claim deduction for your parents as a salaried individual. If your wife is working, then she can make a claim deduction for your parents-in-law. By purchasing health insurance policies for her parents, she can claim up to Rs. 50,000 deduction.
According to the Income Tax law, if you pay the premiums for your single parent or both parents, you can initiate a claim deduction of up to Rs. 25,000. If your parents are above 60 years (senior citizens), then you can increase this claim up to Rs. 50,000.
Purchase a health insurance policy for your entire family so that you can enjoy the maximum tax deduction benefits on your income.
- Pay Rs. 25,000 premium against the coverage for a self, spouse, and dependent children.
- An additional premium of Rs. 25,000 to cover your dependent parents (less than 60 years)
- Or pay an additional premium amount of Rs.50,000 to cover dependent parents (senior citizens, more than 60 years)
If you are paying all your premiums through a debit card, credit card, or net banking, you are only eligible for tax deductions on your income.
Regular healthcare expenses
Any salaried individual can save tax up to Rs. 15000 for their regular healthcare expenses. Your pharmacy bills, healthcare check-up bills, physician’s fees, etc., belong to regular healthcare expenditures.
Preventive healthcare check-up
For any kind of preventive medical check-up of any of your family members, you will get a tax deduction. You can claim up to Rs. 5,000. By submitting all original documents, you can raise the claim.
Maintenance or Medical Treatments for Disabled Dependents
If you are dealing with disabled dependents, you need to spend a chunk of money on their treatment every month. But under section 80D of the Income Tax Act 1961, you will be eligible for a fixed deduction of Rs. 50,000. You may include any family member (your spouse, child, parent, brother, or sister) as your dependent. In the case of the 80 percent disability, then you may claim up to Rs. 1 Lakh per annum for tax deduction from your income. Just submit all relevant documents, including the treatment method, the hospital certificate, other healthcare expenses, self-declaration, etc., and initiate the claim.
Medical Treatment for Dependents with Specified Diseases
If you or your dependent family members suffer from specified diseases (above 40 percent disability), you are eligible for a tax deduction. Under section 80DDB of the Income Tax Act, you can raise your claim. The specified diseases could be cancer, AIDS, chronic renal failure, hemophilia, thalassemia, and neurological disorders.
An individual health insurance policy will make a salaried person’s portfolio resilient and make the person eligible for tax deductions. Thus, every salaried person should purchase a health insurance policy by comparing various market plans. A person should choose the most suitable plan that complements his/her healthcare needs and requirements.