How can senior citizens save Income Tax with medical bills

Health Insurance is a product which increases in significance with the advancement in age. Senior citizens are more likely to face health issues requiring both immediate and regular medical attention. The rising costs of healthcare and India’s high medical inflation make it essential for senior citizens to possess a comprehensive health insurance policy with adequate coverage.

Click here to read about the high rate of medical inflation in India

Senior citizens must have a health insurance policy for the following reasons:

  • Provides Coverage for Ailments Related to Age:
    Senior Citizens are more susceptible to age-related illnesses and medical conditions. Health insurance covers these as well as pre-existing diseases like diabetes, heart-related diseases and asthma.
  • Protects Your Savings from Long-Term Medical Costs on Account of Lifestyle Diseases:
    With our sedentary lifestyle, unhealthy eating habits and environmental pollution we are all vulnerable to lifestyle diseases. The treatment of such diseases, especially at an advanced age is a long-drawn and expensive process. Health insurance helps cover these costs.
  • Financially Covers the Rising Cost of Healthcare:
    Advancements in medical science and technological advances have been instrumental in making the cure to various previously untreatable illnesses possible. However these treatments are very expensive, Medical insurance helps you to cover most if not the entire expenses of such treatment.
  • Comprehensive benefits offered:
    Most health insurance policies for senior citizens are comprehensive policies with the major expenses covered. Such policies normally cover the expenses from hospitalisation, pre and post-hospitalisation, domiciliary treatment and daycare treatments and many more such associated expenses.
  • Protects You from Compromising with Your Healthcare: Health insurance policies for senior citizens provide you with a sum insured cover which may get auto-restored in case you exhaust the same. This ensures that you are not compromising on your healthcare at any time due to lack of coverage.

There are quite a few factors to consider while purchasing a health insurance policy for senior citizens. Ensure you check out the following when deciding on which policy to buy:

  • Daycare treatments covered including advanced medical treatment
  • Robust network of hospitals offering cashless treatment facilities
  • Claim Settlement Ratio (CSR) of the health insurance company
  • Easy claim settlement process
  • Free periodical health check-up facilities
  • Waiting period for certain diseases including pre-existing diseases.

Read here: Know all about Claim Settlement Ratio and Incurred Claim Ratio

Also read: IRDAI has Decreased the Waiting Period for Pre – Existing Diseases from 48 Months to 36 Months and has Reduced the Moratorium Period for Health Insurance Policies from 8 Years to % Years

What does the coverage of a health insurance policy for senior citizens include? Some of the benefits offered by the best health insurance policy in India are as below:

  • Coverage for expenses on account of hospitalisation:
    A health insurance policy for senior citizens will cover hospitalisation expenses, hospital room rent, doctor’s fees, nursing bills, cost of medicines, ICU charges, and fees of other specialists such as surgeons, anaesthetists, etc.
  • Daycare treatments:
    This covers treatments requiring a stay of less than 24 hours and includes dialysis, chemotherapy and physiotherapy.
  • AYUSH Treatments:
    AYUSH treatments, Ayurveda, Yoga, Unani, Siddha and homoeopathy too are covered. A lot of senior citizens prefer such methods over allopathic treatment for the protection of their health.
  • Modern Treatments:
    Modern treatments such as robotic surgeries are covered.

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Tax Benefits for Senior Citizens Under Section 80D of The Income Tax Act, 1961

Now that you have read about the benefits of health insurance for senior citizens, let us read about the tax rebate on health insurance for senior citizens.

Note: The Income Tax Act, of 1961 defines a senior citizen as an individual resident who is above the age of 60 but less than the age of 80. A super senior citizen is one who is above the age of 80 years of age.

Health insurance tax benefits are only available for those who are filing their Income Tax returns under the old tax regime. The health insurance tax benefit 80D limit for an individual who is a senior citizen is as given below:

  1. Rs 50,000 per year for premiums paid for health insurance policies. This premium cannot be paid in cash to avail of the income tax benefit.
  2. Rs 5,000 per year for payments made for preventive health practices and check–ups. This amount may be paid in cash and as such the income tax authorities do not ask for any evidence of this payment having been made.
  3. Rs 50,000 per year for medical expenses incurred only if the person does not have a health insurance policy. While the Income Tax Act, of 1961, does not define medical expenditure in this case, it is generally taken to refer to expenses incurred in medical consultation, cost of impairment aids, cost of medicines, etc.
  4. Rs 25,000 on account of contributions made to the Central Government Health Scheme (CGHS) or any such notified scheme.

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Financial planning for senior citizens should always include the benefits provided by section 80D of the Income Tax Act, of 1961. Not only does it provide financial relief, but more significantly if offers you coverage.