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Section 80D of the Income Tax Act
The Indian government provides multiple ways to the citizens of the country to reduce their tax burdens. From mutual fund investments and loans to health insurance, there are several options that can help you enjoy such reductions on taxes. Out of the many tax-saving laws that are launched by the government, section 80D of the Income Tax Act, 1961 is one of the most common ways to save on taxes.
What is section 80D in the Income Tax Act, 1961?
Section 80D is a portion of the entire Income Tax Act that was passed by the government in 1961. This section highlights the tax deductions that one can enjoy when paying the premium of their health insurance policy. Section 80D is applicable to the premiums you pay for your regular health insurance, life insurance, critical illness health insurance, and top-up insurance plans. Furthermore, you can also enjoy the deductions provided by section 80D Income Tax Act on the health insurance policies that you buy for your family members such as spouse, kids, and parents. Section 80D is also applicable to the premium you pay for the riders that are included in your health insurance policy
Conditions applicable on the tax deduction under section 80D
The tax deductions offered by Section 80D vary depending on the age of the primary policyholder. To give you a clearer idea, here are the conditions that are applicable for tax deductions
Conditions on health insurance policies that are bought for self, spouse, or children
As per section 80D of the Income Tax Act of 1961, you can enjoy up to Rs.25,000 of tax deductions per financial year on the premiums of health insurance policies that are bought for you, your spouse, and your kids. Do note that the upper limit of tax deduction enjoyed through Section 80D reaches up to Rs.50,000 for senior citizens
Conditions on health insurance policies that are bought for your parents
Under section 80D, you can enjoy a tax deduction of up to Rs.25,000 on the premiums you pay for the health insurance policies that are bought for your parents. However, if your parents are above 60 years of age and you are below the same threshold, you can get an annual tax deduction of up to Rs.50,000
Conditions to get tax deductions that are more than Rs. 50,000
There are two conditions under which you can enjoy a yearly tax deduction that is worth more than Rs.50,000 in a year. Firstly, if you, your spouse, or your kids are aged below 60 but your parents are above the age of 60, you can enjoy a section 80D deduction limit of up to Rs.75,000 (Rs25,000 + Rs. 50,000). Secondly, if you, your spouse, or your kids are aged above 60 and your parents are also above the age of 60, you can get a tax deduction of up to Rs.1,00,000 in such a scenario
Tax deductions by section 80D on preventive check–ups
Apart from the premium of health insurance policies, you can also avail of the tax deductions offered by Section 80D on the fees you pay for preventive health check-ups. A preventive health check-up is done to detect an illness at an early stage and get it treated before it does severe damage to the body
Preventive health check-ups became a part of Section 80D in 2013 as an initiative taken by the government to encourage the population to be more self-aware about their health. As per Section 80D of the Income Tax Act of 1961, you can get an annual tax deduction of up to Rs.5000 on the fees you pay for preventive health check-ups. This is inclusive of all the money you pay for a check-up of your entire family (spouse, kids, and parents).
What is section 80DDB?
80DDB is a section in the Income Tax Act of 1961 that helps Indian citizens to avail tax deductions on the medical expense incurred due to the treatment of certain chronic diseases. According to section 80DDB, if you are below 60 years of age, you can enjoy a tax deduction of up to Rs.40,000. However, for senior citizens, the upper limit of the tax deduction is stretched to Rs. 1 lakh under section 80DDB
Illness such as cancer, AIDs, and Parkinson's disease are counted as eligible for the tax deductions offered by section 80DDB. You can get a complete list of such illnesses by referring to the rule of 11DD.
What is section 80DD?
Section 80DD is a part of the Income Tax Act of 1961 that allows Indian citizens to get tax deductions on the money they pay for the treatment of a disabled and dependent person. According to section 80DD, you can claim tax exemptions of up to Rs.75,000 on the treatment of a dependent who is about 40% disabled. The section further provides a tax exemption of Rs.1.5 lakhs on the treatment of a dependent person who has a major disability, more than 70%. The dependents, according to Section 80DD, can be the parents, spouse, children, and siblings of the taxpayer.
Points to remember
You cannot avail the tax deductions offered by Section 80D if you pay for the health insurance premiums in cash. Hence, it is better to always pay for your health insurance policy using credit cards or debit cards. However, you can still claim a deduction of Rs.5,000 even if you pay for the preventive health check-ups using cash
Section 80D is not applicable on the medical insurance premium paid by an employer on behalf of his/her employees.
The tax deduction available under Section 80D is only applicable if your parents, children, and spouse are not working professionals.
Many people confuse the tax deductions offered under Section 80D with the tax deductions offered under Section 80C. While Section 80D provides tax deductions on the premium of your health insurance plan, Section 80C offers tax benefits on the investments made in the Indian capital markets
We hope that this was an insightful read for you today.
Disclaimer: The above information is indicative in nature. For more details on the risk factor, terms and conditions, please refer to the Sales Brochure and Policy Wordings carefully before concluding a sale
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Health Insurance
How to File a Health Insurance Claim?
With the rising medical expenses and changing lifestyles, it has become imperative to purchase a comprehensive health insurance plan in today‘s time. Additionally, the recent COVID-19 pandemic has further established the importance of health insurance even firmly. A health insurance policy is the finest way to receive the best medical treatment without burning a hole in your pocket.
Be it an unforeseen medical emergency or a planned treatment, a health insurance policy can always come to your rescue. However, to avoid any last-minute hassle, you must be well aware of the process to file a health insurance claim beforehand. Below is a quick guide on how to file a health insurance claim.
But firstly, let‘s understand what a health insurance claim is.
Health Insurance Claim
A health insurance claim is a request that a policyholder must submit to the insurer for getting the services that are covered in their health insurance policy. Depending upon their convenience, policyholders can either opt for a cashless claim settlement option or reimbursement for the availed medical services.
Cashless Claims
For cashless claims, the insurance provider settles the hospitalization bills directly with the hospital. However, to get the benefits of a cashless claim, the policyholder should be hospitalized only at a network hospital of the insurer.
Reimbursement Claim
In case of reimbursement claims, the policyholder pays for the hospitalization expenses and later requests for reimbursement by the insurance company. The reimbursement facility can be availed at both network and non-network hospitals.
Now that you are well aware of the types of health insurance claims, let‘s understand how to file a health insurance claim
How to File a Health Insurance Claim?
1. Get in touch with the insurance help desk at the hospital
2. Show the ID card of the insured provided by the insurance company
3. The hospital will verify the insured‘s identity and will submit the pre-authorization form to the insurance company
4. The insurance company will then review all the documents submitted and process the claim as per the terms and conditions of the health insurance policy.
5. For reimbursement claims, you will also have to submit original bills to the insurance provider. The insurer will then evaluate the claim and make a payment to the insured. In case the treatment is not covered under the health insurance policy, the claim will be rejected.
Make sure that you have the following documents readily available with you before filing a health insurance claim.
Documents Required to Make a Claim
Valid photo ID cards such as Aadhaar, PAN, and Driving License
Copies of prescription for diagnostic tests, treatment advice, and medical references
Original set of investigation reports
Original hospital and pharmacy bill
Original discharge card or discharge certificate
It‘s always advisable to opt for an insurance company with a high claim settlement ratio and a large number of network hospitals. This makes the claim settlement process completely hassle-free.
Frequently Asked Questions (FAQs)
1. When can my health insurance claim be rejected?
Your claim can be rejected if you file a claim for an ailment that isn‘t covered by your health insurance policy. Moreover, your claim can also be rejected if you fail to submit the necessary documents or file a claim during the waiting period
2. What is the minimum time limit for hospitalization to make a health insurance claim?
You can file a claim if your hospitalization is for more than 24 hours. However, for certain treatments, such as dialysis, chemotherapy, etc., the stay could be less than 24 hours
3. What is claim settlement ratio?
The claim settlement ratio is the ratio of number of claims paid to the number of claims received
Health Insurance
All About Adding Spouse To Health Insurance After Marriage
Marriage brings a lot of changes in your life. Not only does it affect your lifestyle, but it also requires you to switch your investments in a way that are better suited for a family. You will now want to include your spouse to your financial world by adding them as a nominee in your banking accounts and other investment assets. Amidst all these personal and financial changes, do not forget to add your spouse to your health insurance plan. Adding spouse to health insurance after marriage is quite easy and can be done in three ways.
Buying a new family floater plan
If you do not have an existing health insurance plan, now would be a great time to invest your money in a family floater health insurance plan. Health insurance plans for family members cover your spouse, parents, and dependent children. The family floater plan allows you to pay a single premium to cover all named family members for medical expenses.
When buying a family floater plan, do ensure that it offers adequate coverage for you and your family. It is also important to keep in mind that the coverage amount is directly proportional to the health insurance premium you need to pay. This means that a family health insurance plan that offers a sum insured of Rs 10 lakh will require you to pay lower premium as compared to a family health insurance plan that offers coverage of Rs 20 lakh. However, it is advisable to opt for a higher sum insured if you have senior members in the plan.
Adding spouse to insurance after marriage
If you already have an existing health insurance policy, you can extend the cover to your spouse by adding their name to the policy after marriage. Upon adding you spouse, the individual health insurance plan will be transformed into a family floater plan. Since the coverage amount will increase, the premium of the policy will be recalculated. You can also add your spouse to your existing health insurance policy at the time of its renewal. You will need an application form and a few KYC documents like identity proof, residence proof, marriage certificate and photographs, to get this process started. You can easily get the application form from the insurer’s website.
Adding your spouse to the health insurance plan offered by your employer
There are many companies that offer health plans to their employees. These plans usually extend the coverage to the immediate family of the employee. However, this condition varies from one insurer to the other. Hence, it is better to check with your insurance company if they allow you to add your spouse to the existing health insurance plan that is issued by your employer. Here, it is important to remember that the health insurance policies offered by employers are group insurance plans and may, therefore, have certain limitations to coverage. Still, these plans offer a great option for coverage in case you don’t have health insurance of your own.
It is quite important to avail the health insurance cover for your spouse after marriage. This can help the both of you to securely plan your financial future.
Disclaimer: The above information is indicative in nature. For more details on the risk factor, terms and conditions, please refer to the Sales Brochure and Policy Wordings carefully before concluding a sale.
Health Insurance
Steps of adding spouse to health insurance after marriage
Marriage is a huge step in everybody’s life. And personal finance has a big role to play for a successful married life. Therefore, it is important to update the financial records, including the health insurance plan, post-marriage.
In case you did not have an individual health insurance policy before the wedding, you can invest in a family floater plan for yourself and your spouse. In case you already have an individual health insurance policy at the time of wedlock, then you do not need to buy another one for your partner. Instead, you can add your spouse to the plan and convert it into a single policy. It is a feasible and simple way of ensuring that you and your partner are adequately covered.
Porting health insurance after marriage is also important. When one of the partners already owns a plan, you simply need to add another partner to the current policy as the spouse. There is no specific rule which specifies who can add the partner. The process of adding the spouse to health insurance after marriage is simple. The one who owns the policy can start this process with the submission of KYC documents such as identity proof, proof of age, photographs and marriage certificate.
The change will come into effect in the next policy renewal by just submitting the additional form and paperwork. Once you do this, the premium will be calculated and pro-rated. It will become a family floater insurance policy that covers all the members of the family for a single premium. You will not have to worry about paying separate premiums for each member of the family. It will cover the entire family at the lowest premium based on the age of the members in the family. Let us take a look at the benefits of a family floater plan.
A major perk of the floater plan is that you can cover yourself and your entire family in one policy. The policy is easier to handle and you do not have to worry about handling separate individual plans
You enjoy additional benefits like a newborn cover, maternity benefits, etc. It will be highly effective for young married couples who are on the road to starting a family. You must ensure that you choose a plan that covers yourself and the spouse and invest in one right after marriage
You must also get maternity cover at the earliest. It has a waiting period between 0 to 4 years and if you buy the cover on time, you will be able to enjoy the maximum benefits
With a family floater plan, you enjoy the same tax benefits under Section 80D as you do on individual health insurance
Many plans come with a reinstatement feature where you enjoy the reinstatement of the entire coverage after it is exhausted in the policy period. This is only applicable to unrelated claims but it is very useful.
If you do not have a policy and are looking to buy one, consider a joint life policy. It will work on the same lines and will provide coverage to your children in future if anything unfortunate happens to the parents. The main reasons couples should think of joint life insurance are premium reduction and waiver benefits. In this case, if one partner dies due to an unfortunate event, the spouse will not only be entitled to enjoy the full sum assured on the cover but will also be absolved of the responsibility of the payment of premium. Alternatively, the spouse may have to pay premiums only applicable for their own cover for the remaining period of the policy.
After your marriage, it is your responsibility to ensure the safety and adequate coverage of your spouse. You must include your spouse in the decision and speak to them about the coverage you wish to buy. Only then proceed with the decision. The right health insurance plan will offer acomplete protection and peace for the future.
Disclaimer: The above information is indicative in nature. For more details on the risk factor, terms and conditions, please refer to the Sales Brochure and Policy Wordings carefully before concluding a sale.
Health Insurance
Advantages of Group Health Insurance
As the name suggests, group health insurance is aimed to offer health insurance cover to a group of people, usually employees, and if offered by an employer. It can also be offered to members of a professional association or a society. As compared to individual insurance, group insurance has many benefits for the employee as well as the employer who offers the insurance.
Comprehensive cover: Group health insurance plans offer wide coverage and can be customised by the employer. It comes with many benefits like cashless healthcare services at network hospitals. There is no waiting period which means the employee is covered from day one. Besides personal accident cover, some group health insurance plans offer cover to family members of the employee.
Guaranteed cover: All employees and in some cases their dependants are covered, even if they have existing medical conditions. A group insurance policy doesn't require a separate medical check-up. As long as an employee is working for the organisation offering group health insurance, he or she shall remain covered under the plan.
Low premium: As group health insurance plans are bought for a larger group of people, they offer comprehensive cover at affordable rates. The costs are much lower than individual health insurance plans. Group health insurance plans can be customised as per the employer’s budget and requirements.
Tax incentive for the employer: Besides safeguarding employees from health issues, group health insurance plans also provide tax benefits to the employer. Under Section 80D of the Income Tax Act, tax relief is offered to businesses that give their employees the benefit of group health insurance.
Happy employees: When companies offer health insurance plans to their employees, they help retain and attract good talent. A Group Health Insurance plan is a significant part of the employees’ total compensation. A group health insurance plan provides employees with financial security against accident and illness.
Rider options: With a nominal extra payment, employees can take advantage of other additional benefits. The employee can also opt for a corporate plan along with the base plan offered by the employer. The riders may differ from one organisation to another.
Provide your employees SBI General Group Health Insurance
Group health insurance is a very important benefit that makes employees feel like a valued part of an organisation. It helps companies retain as well as attract talent. SBI General Group Health Insurance plans offer multiple coverages: Individual, family floater. It offers wide coverage from Rs 1 lakh to Rs 7.5 lakh. The group health insurance plans offer pre- and post-hospitalisation expenses. With SBI General group health insurance plans keep your employees happy.
Disclaimer: SBI General Insurance Company Limited I Corporate & Registered Office: 'Natraj', 301, Junction of Western Express Highway & Andheri - Kurla Road, Andheri (East), Mumbai - 400 069. | The information in the advertisement is indicative in nature. For more details on the risk factor, terms and conditions, please refer to the Sales Brochure and Policy Wordings carefully before concluding a sale. * ‘Tax benefits are subject to changes in tax laws’ I 'For SBI General Insurance Company Limited IRDAI Reg. No. 144 dated 15/12/2009 | CIN: U66000MH2009PLC190546 | SBI Logo displayed belongs to State Bank of India and used by SBI General Insurance Co. Ltd. under license. | Website : www.sbigeneral.in,Tollfree 18001021111 | UIN: SBIHLGP21330V022021 | ADDIG/20-21/AUG/652
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