With medical inflation reaching a high of 13-15%, it only becomes necessary to invest in a health insurance policy. Such a plan helps you avail of a cashless facility or seek reimbursement of all expenses incurred in an event of hospitalization. It offers financial protection against medical contingencies without exhausting your life savings or affecting your financial condition.
Heath insurance policies provide coverage against hospitalization-related expenses, such as ambulance services, treatment cost, doctor’s consultation, and room rent, among others. It also covers all pre-hospitalization and post-hospitalization expenses. You may enjoy these health insurance benefits by simply investing in a mediclaim cover. Insurance providers these days offer coverage from INR 1.5 lakh to INR 50 lakh. Besides, you may opt to cover your loved ones, including your parents, parents-in-law, grandchildren, grandparents, and your dependent siblings. Health policies come with a life-long renewal option and allow you to select a policy term of your choice, say one, two and three years.
Advantages of health plans
The advantages offered through health cover insurance are manifold. Following are top three benefits that you may usurp from your policy.
- Convalescence benefit
Not many are aware of this, but most health insurance plans offer convalescence benefit. Along with the hospitalization expenses, the insurance provider also takes care of your recovery expenses. The convalescence benefit is over and above the defined sum assured amount and is paid to you as a lump sum amount. This benefit may be used to provide coverage towards supplementary costs, for example, loss of income while you are hospitalized or visits by family members. The insurance provider is liable to pay a lump sum benefit in an event of hospitalization for a longer period, generally for a period of seven to ten days. In certain cases, the post-hospitalization period is treated as the recovery period. However, you need to be aware of the eligible amount and time period in order to avail of this benefit.
Certain insurance providers, such as Bajaj Allianz Life, offer a convalescence benefit of up to INR 7,500 per year. This benefit is available on both individual plans as well as family floater policies. For example, assume that you are hospitalized for a period of nine days. You are eligible to receive the lump sumconvalescence benefit of INR 7,500, over and above your sum insured amount.
- Coverage of expenses in regard to organ transplant
There may be certain conditions that require you to have an organ transplant surgery, say the failure of an organ. The cost of such transplants is exorbitant. For example, a kidney transplant costs around INR 3 lakh to INR 5 lakh in India. There are numerous costs involved in the process such as surgeon’s fee, room rent, as well as cost towards various evaluation tests for a kidney transplant, such as dimercaptosuccinic acid test (DMSA), blood tests, heart tests, and renal biopsy, among others. Making out-of-pocket expenses towards the same can burn a huge hole in your pocket. You must, therefore, ensure that your mediclaim policy covers such expenses. Some insurance providers reimburse the cost but have an upper limit on the coverage amount. Some insurers only cover expenses towards harvesting the organ. This means that other costs towards screening expenses, complications arising post-surgery,and donor’s hospitalization charges cannot be claimed for reimbursement. To remain financially secured against these expenses, you may compare various health insurance plans and choose the one that covers organ donor expenses up to the sum insured amount. This way, you are free from any financial burden associated with this kind of medical contingency.
- Tax benefits
Along with providing medical coverage, health insurance plans offer tax benefit too. Section 80D of the Income Tax Act, 1961, allows deductions in lieu of premiums paid towards mediclaim policies. The maximum deduction you are eligible for under this section is INR 25,000. This covers premiums payable for covering yourself, spouse, and dependent children. In case, you are covering your parents (who are not senior citizens yet), you may claim an additional amount of INR 25,000. You may, therefore, avail of tax deduction of up to INR 50,000.
The good news is that senior citizens are offered a higher tax exemption limit. Earlier, the deduction limit was capped at INR 30,000. Keeping in mind the escalating cost of health care facilities, the Government of India now offers greater tax relief on premiums paid towards mediclaim policies for senior citizens. You may avail of tax deduction on your taxable incomeup to INR 50,000 in case you are a senior citizen. Additionally, if your parents are senior citizens, you may enjoy an additional tax relief of INR 50,000. This results in a total tax saving of INR 1 lakh (INR 50,000+ INR 50,000).
The Income Tax Act also provides tax exemption towards expenses borne for treatment of critical diseases. With effect from Financial Year 2018-19, you may enjoy tax deduction of INR 1 lakh under Section 80DDB.
Besides the aforementioned benefits, other aspects to look out for include coverage towards domiciliary treatment, sum insured reinstatement, ayurvedic treatment, homeopathic treatment, maternity, and newborn baby cover, daily cash benefit, day care treatment, and access to a cashless facility. By ensuring that your health cover has these benefits, you are assured of having all your coverage needs to be met.