Importance of Health Insurance

Medical costs are rising rapidly in India, making it essential to have a health insurance policy that covers hospitalization and critical illnesses. As a Chartered Accountant, advising your clients to opt for appropriate health coverage not only safeguards their finances but also provides tax-saving advantages.

• Helps manage high treatment costs without exhausting savings.
• Cashless hospitalization in a wide network of hospitals.
• Coverage for pre- and post-hospitalization expenses.
• Peace of mind during medical emergencies.
• Critical for self-employed individuals without employer group insurance.

Types of Health Insurance

Choosing the right type of policy depends on individual needs, family structure, age, and medical history. Here are the common types:

Individual Health Insurance

Ideal for young professionals or single individuals. Provides a fixed sum insured only for the policyholder.

Family Floater Plan

Cost-effective plan where a single sum insured covers all family members (spouse, children, parents).

Critical Illness Cover

Offers a lump sum payout on diagnosis of serious illnesses such as cancer, heart attack, or kidney failure. Often used alongside standard plans.

Top-up and Super Top-up Plans

Affordable way to enhance existing coverage. Useful for people who already have employer health insurance but want higher coverage.

Senior Citizen Plans

Tailored for individuals above 60 years. These usually have higher premiums and may include medical tests and co-payment clauses.

Tax Benefits under Section 80D

Health insurance premiums qualify for tax deductions under Section 80D of the Income Tax Act. Here's how much your clients can save:

Note: Premium must be paid via non-cash mode to claim 80D deduction.

How to Choose the Right Plan

• Assess medical needs – Chronic illness in family? Opt for higher coverage.
• Compare premiums – Online aggregators help identify cost-effective options.
• Check network hospitals – Ensure preferred hospitals offer cashless facility.
• Understand sub-limits – Watch for limits on room rent, ICU charges, etc.
• Claim settlement ratio – Choose insurers with >95% CSR for reliability.
• Read the fine print – Waiting period, exclusions, and co-payments should be evaluated.

Recommended Insurers in India

• Star Health & Allied Insurance – Leading standalone health insurer with broad cashless network.
• HDFC ERGO – Known for digital claim processing and wellness features.
• Care Health Insurance – Offers tailored plans for families and senior citizens.
• Niva Bupa – Comprehensive health coverage and no-claim bonus options.
• ICICI Lombard – High sum insured options and smooth claim handling.
• New India Assurance – Reliable PSU option for conservative investors.

Claim Settlement Process

There are two types of claim processes—cashless and reimbursement. Here's a quick overview:

Cashless Claim:

• Get admitted to a network hospital
• Show health card & ID proof
• Hospital sends pre-authorization to insurer
• Insurer approves & pays directly

Reimbursement Claim:

• Pay medical bills upfront
• Submit original documents within 15–30 days
• Insurer verifies and transfers eligible amount to your account

FAQs for Tax Planning

• Can I claim for multiple health insurance policies under 80D?
  Yes, as long as the aggregate limit isn't exceeded.
• Do I need to submit premium receipts while filing ITR?
  No submission is needed, but you must retain proof for assessment.
• Is health insurance for in-laws eligible?
  No, only self, spouse, children, and parents are covered under 80D.
• Can I claim deduction if the policy is in my parent’s name?
  Yes, if you are paying the premium and they are dependent or eligible under 80D.
• Does OPD or dental treatment get covered?
  Some plans offer OPD/dental cover but check exclusions in the policy document.