What is Critical Illness Health Insurance?
Critical illness health insurance is a type of policy document that covers long-term illnesses and serious ones. Such illnesses generally need highly expensive medical care. Many health insurance plans will give you critical illness rider coverage by paying an additional premium. This helps the insured to cover hefty hospitalisation bills and other associated treatment expenditures.
A critical illness insurance policy grants assured protection to the insured against life-threatening conditions such as cancer, renal failure, heart attack etc. The medical insurance provided is in a lump sum amount which helps to cover exorbitant medical bills.
Eligibility Criteria to Purchase Critical Illness Health Insurance
A few rules need to be met in order to purchase critical insurance:
- The minimum entry age is 18 years
- The maximum age to add critical illness is 65 years
- People irrespective of gender can purchase critical illness health insurance at fixed premium rates
Other factors that make you an ideal candidate to purchase a critical illnesses medical insurance
- Candidates who have a record of critical illness in the family must consider insurance that will rightly provide protection against the same.
- If you are the sole breadwinner of the family you will have to manage tons of expenses that are not just limited to medical ones. Electricity bills, property rents, grocery bills, education bills, water bills and more! To manage your money smartly, you must invest in critical illnesses health insurance while you can.
- Are you or any of your family members involved in an extremely high-stress profession? If the answer is yes, then working in such a job for a prolonged period is likely to cause stress, anxiety and various health issues arising out of stress such as hypertension, sleep deprivation-induced insomnia, gastroenteritis problems and so on. Being wise, the possibilities will surely help you manage your financial expenditure if a critical illness were to take over you.
- Once you cross the 40’s threshold, even the fittest of people are likely to experience hiccups in terms of health problems.
What are Tax Benefits Under Critical Illness Health Insurance
Medical insurance doesn’t only offer loan amounts and ends there when it comes to benefits. Almost all health insurance including Medical insurance offers exciting tax benefits which can become an alluring feature for many investors. So, given the interest in tax benefits features of medical insurance, are such policies tax deductible?
Medical insurance provides tax benefits on the premium amount that you pay. Such insurances are tax-deductible under Section 80D of the Indian Income Tax Act. So, the amount you pay like a premium for the health insurance coverage will be deducted from your taxable income. This is, however, subject to certain limitations.
This feature ensures that the taxable income and the applicable tax reduce. One thing to note is that the Income Tax Act specifies two types of premium payments- one, on the policy for your family (including you) and two, on the policy brought for senior citizens like your parents. So, critical illness health insurance premiums under Section 80D can be claimed on family health plans and on individual ones as well. Non-Resident Indians (NRIs) and Hindu Undivided Families (HUFs) can also claim income tax deductions on medical insurance policies that have been purchased in India. The mediclaim deduction limit will be based on the age of the policy’s primary holder.
Below is mentioned the deduction limit amount as per age and category groups:
- Policyholders less than 60 years are eligible for a maximum deduction limit of Rs. 25,000
- Policyholders aged 60 years and above are eligible for a maximum deduction limit of Rs. 50,000
- Non-Resident Indians can claim a maximum deduction of Rs. 25,000, irrespective of age for themselves or their parents for policies purchased in India.
Conclusion:
From the above explanations, it is clear that Critical illnesses health insurance is a good investment not just for yourself but for your family and your future in general. If money matters are holding you back, the tax deductions mentioned should help you to make the right decisions at the right time.
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