Eligible Assessees
Individual and Hindu Unified Families (HUF) only

Scope
Premium paid under:

• Medical insurance scheme of The General Insurance Corporation approved by the Central Government, or
• Any other insurer approved by the Insurance Regulatory & Development Authority (IRDA)

Mode of Payment
Any mode of payment is accepted including payments made through credit cards, except cash.

Deduction

• For non-senior citizens: The amount of mediclaim insurance premium paid or Rs. 15000, which ever is less
• For senior citizens: The amount of mediclaim insurance premium paid or Rs. 20000, whichever is less.

Scope of Coverage

• For an individual: Insurance paid on the health of an assessee, spouse, dependant parents, and dependent children
• For a HUF: Insurance on the health of any family member

Let us now understand the implications with the help of an example:

Mr. Ashok furnishes the following information relating to premium on Mediclaim policy paid by cheque:

• For self - Rs. 7000
• For spouse - Rs. 10000
• For dependent father (age 68 years) - Rs. 7000
• For dependent mother-in-law (age 66 years) - Rs. 5000

What is amount of deduction allowed under Section 80 D of the Income Tax Act?

Mr. Ashok paid a total of Rs. 17000 for him and his spouse.

The total deduction under Section 80 D available for him is Rs. 15,000 (premium paid or Rs.15000 whichever is less)

Mr. Ashok pays Rs. 7,000 for his dependent father (age 68), which is eligible for additional deduction.

Adding this to the premiums paid for him and his spouse, his total deduction comes to Rs. 24000.

It should be noted that health insurance premium paid on dependent parents and children are only allowed to be deducted under Section 80D. The criteria of dependency isn’t applicable in case of a spouse (i.e. she/he may even be independent, but the assessee can still pay the premium on his/her life to get tax benefits for the same)

However, the act does not cover relatives anyone other than those mentioned above, so the premium paid by Mr. Ashok for his dependent mother-in-law isn’t eligible for deduction. However, his wife can pay the premium towards her mother’s health plan and claim tax benefit for the same.

http://economictimes.indiatimes.com/Personal_Finance/Insurance/Insurance_news/ICICI_Lombard_to_expand_Nirmaya_scheme/articleshow/3468650.cms

Nirmaya, the new health insurance plans for the mentally disabled launched by ICICI Lombard, sounds like very unique product. This scheme will not need a medical test for anyone who is looking to buy the policy. The annual premium charged is also quite low which covers routine medical check up, therapy to corrective surgery, and transportation.

The policy is specially designed for the welfare of people suffering from autism, mental retardation, cerebral palsy, as well as multiple disabilities. Family members of the mentally disabled person can reduce their financial load by buying such policies.
In all the policy looks very good and may be a major hit among people who are looking out for these kinds of policies for any of their family members or friends. Many NGOs will also make use of this policy for people who are mentally disabled. It is a great step taken by ICICI Lombard to benefit a part of society that is criminally overlooked when it comes to such matters.

Here is a story about Islamic organizations terming health insurance policies as illegal and issuing a fatwa asking Muslims to keep away from them.

http://economictimes.indiatimes.com/Personal_Finance/Insurance/Health_Insuarance_illegal_Islamic_body/articleshow/2930737.cms

This has raised a doubt in my mind as to how Islam cannot allow taking health insurance. I have a valid reason. At the time of Holy Prophet (s.aw.s) whenever there was any war, soldiers used to cover themselves with armor to protect them. In my opinion the Holy Prophet (s.a.w.s) has shown that one has the right to protect one self against any uncertain event. No matter that the ultimate protection lies in God’s hands.

In the same vein, whether your health cover will help you or not is ultimately in God’s hands; but it IS your responsibility to make sure that you are adequately protected.

The point I want to make is, please provide proper daleel (proof) why it has been declared illegal so that if I am wrong I may correct myself. If possible, quote Quranic ayat and tradition or precedent supporting it.

Do I need Mediclaim?

This is the question which comes to every one’s mind when we talk about Mediclaim. The first defending line is, “I am healthy and fit; why do I need a Mediclaim policy?” Well, in today’s world, every person is running around from morning to night ignoring his/her health, skipping meals, hectic schedules. Where do we have time to really take care of our health? Keeping diseases at bay is not always in our hands, so why not at least have a policy that will take care of our financial needs if, God forbid, something happens to us or our dear ones.

Who can be covered?
Well, any person in the age group of 5 to 75 yrs can be covered under this policy. Children between the ages of 3 months to 5 yrs can be covered along with their parents.
Group insurance schemes are also available for a homogenous group of more than 50 people.

What is covered in Mediclaim policy?
Expenses incurred by the insured for hospitalization for illness/diseases or injury sustained (domiciliary hospitalization also payable as per policy).

These include hospital charges ( room, boarding & operation theatre ) fees for surgeon, anesthetist, nursing, specialist etc., diagnostic tests, cost of medicines, blood, oxygen etc., cost of appliances like pacemaker, artificial limbs etc.

Benefits of Mediclaim?
You get an exemption under the Income Tax Act, Section 80D for premium paid by cheque.
There are also benefits for a family cover under a single policy. You can avail a 10% discount of the total premium under a family policy.
In group insurance the premium payable is relatively lesser than premium paid for a single person.
The sum insured will be increased by 5% cumulative bonus for every claims-free year. If there is a claim in a policy with cumulative bonus 10% of the sum insured will be reduced from the earned bonus.

The Mediclaim protection is available for illness/disease contracted anywhere in the world provided the treatment is availed in India.
And for those who cannot afford to pay the exorbitant hospitalization fees during admission there is cashless Mediclaim wherein the insurer pays the amount in advance.

Policy amount paid?

• The insurer pays the actual hospitalization expenses to a maximum of Rs.15000 to Rs.500000 depending upon the sum insured. The sum insured is the maximum what the insurer pays the insured.
• Actual domiciliary hospitalization expenses limited to Rs.3000 to Rs.50000 depending on the sum insured chosen at inception.
• Cost of health check up reimbursable at the end of 4 continuously claims-free underwriting years, limited to 1% of average sum insured of the four claims-free years.

Today awareness of health insurance is better than before. Still many of them do not translate it into action. People do not save enough to meet their medical emergencies. One has to understand that the cost of health care expenses like hospitalization, tests and surgeries are on the rise. A few are fortunate, who are economically sound, and can afford the rising costs of medical expenses. Health care is something one would never like to compromise on. So it’s vital enough to prepare ourselves to meet the unpredictable medical expenses to protect us.

It’s a widely accepted fact - To tackle the rising cost of medical expenses health insurance is regarded as the most cost effective route one can adopt. Let’s understand more about health insurance. Health Insurance offers a comprehensive range of covers. It covers all the medical expenses that one could incur such as routine checkups, surgeries, medical bills, treatment for critical illness, and hospitalization expenses. There are also plans available that take care of specific critical illness, which one may fear the most.

Before opting for a health plan one should take into consideration the following pointers:

• Cover - A health plan should cover the policyholder from all possible medical expenses.
• Term - Opt for a health plan which may offer the longest term.
• Sum Assured - Before deciding the sum assured on should take into consideration the lifestyle, kind of hospital one would prefer.
• Transparency - The underwriting of the policy must be clear. It should mention clearly the cover one has opted.

As people buy other kinds of insurance and investments to protect against unexpected financial cost, one should also buy health insurance as one’s health comes first. So that one can concentrate on recovery of heath rather than worrying about the medical bills.

Even in this rising inflation scenario health insurance helps the commoner to achieve:

• Saving money - With exorbitant costs of medical treatment, paying a nominal health insurance premium can save thousands, ten of thousands, or even more if one ever needs a medical treatment.
• Peace of mind - Even if you are healthy, accidents can happen. But when one knows that all unpredictable medical expenses have been taken care of, one attains a level of satisfaction and peace of mind that is immeasurable.
• It’s affordable: It’s less expensive and can be designed to meet your personal needs.

So, favor one self by taking a health insurance policy before any health problem arises.

The author is a Research Analyst at Apnaloan.com Services (P) Limited.