As we age, health concerns tend to increase, and accessing healthcare becomes a critical need. For senior citizens, this becomes a big hassle due to rising healthcare expenses and the potential for age-related diseases. An effective way to address this is through health insurance, which provides financial coverage for the medical requirements of senior citizens.
To support such initiatives, the government also facilitates several tax benefits to senior citizens on their health insurance premium payments.
The following section explores senior citizen mediclaim policy, the available tax savings, and more.
What is Senior Citizen Health Insurance?
Senior citizen health insurance is designed to meet the healthcare requirements of people over 60. In contrast to standard health insurance policies, these plans provide extensive coverage for the medical requirements of senior citizens. They include hospitalization, surgery, consultation with physicians, cataract treatments, and even coverage for pre-existing diseases (subject to waiting periods).
Some senior citizen medical insurance policies also provide cashless treatment, wherein the insurer pays the hospital directly, and no out-of-pocket expenses are borne during treatment.
Why Should Senior Citizens Invest in Health Insurance?
- Rising Medical Expenses: Medical costs are skyrocketing, and senior citizens need medical attention more often. Having health insurance for senior citizens means that they will not be economically strained in case of emergencies or prolonged treatment.
- Preventive Care: Regular health check-ups and early detection of medical conditions are critical for senior citizens. A senior citizen health insurance scheme may cover preventive care like annual check-ups, vaccinations, and screenings, enabling early intervention and better health outcomes.
- Cashless Treatment: Most policies provide cashless medical coverage for senior citizens, which means the insured is not required to pay up-front during hospitalization and treatment. Instead, the insurance provider directly settles the amount with the hospital.
- Critical Illness Coverage: Senior citizens are at higher risk of life-threatening diseases. Most health insurance senior citizen policies cover critical illnesses, which provide financial assistance for critical health issues such as cancer, heart disease, or stroke.
- Tax Benefits: Other than offering health coverage, senior citizen mediclaim policies get lucrative tax benefits under Section 80D of the Income Tax Act.
Tax Benefits on Senior Citizen Health Insurance
Senior citizens’ health insurance policies enjoy several tax benefits under the Indian Income Tax Act. Here’s a detailed overview:
Tax Deduction Under Section 80D.
Section 80D of the Income Tax Act provides a deduction on premiums paid towards health insurance policies, including senior citizen policies. The premium paid for health insurance policies covering you, your spouse, children, and parents can be claimed under this deduction.
- For those under 60 years, the tax deduction is a maximum of ₹25,000.
- For senior citizens (60+ years), the maximum deduction allowed is ₹50,000.
Thus, if an individual purchases health insurance for senior citizens, they are entitled to a deduction of ₹50,000 per financial year on the premiums paid. For super senior citizens, the amount of available tax deductions is the same.
Deduction for Preventive Health Check-ups
Apart from the normal health insurance premium, a tax deduction of ₹5,000 can be availed for the cost of preventive health check-ups. However, it is a part of the total ₹50,000 deduction for senior citizen insurance plans.
Tax Allowances for Policies Purchased for Parents
Individuals who have purchased medical insurance for senior citizen policies for their parents can claim the same allowance under Section 80D. If the parent is a senior citizen (over 60), the person can claim a deduction of up to ₹50,000.
Best Senior Citizen Health Insurance Plans
When choosing the best senior citizen health insurance policies, look no further than the Senior Citizens Red Carpet Health Plan offered by Star Health. It provides coverage of up to ₹25 lakh and encompasses a range of benefits, including:
- Hospitalization Coverage: The policy covers the cost of hospitalization, which includes room charges, medical treatment, and surgeon fees.
- Pre- and Post-Hospitalization Costs: It offers coverage for the medical costs incurred before and after hospitalization, with complete protection throughout the treatment phase.
- Cashless Treatment: Star Health provides an extensive network of hospitals where policyholders can avail themselves of cashless treatment. This eliminates the need for upfront payment, which is particularly helpful for senior citizens during emergencies.
- Pre-existing Conditions: The scheme offers coverage of pre-existing conditions after a waiting period, ensuring that senior citizens suffering from chronic conditions like diabetes or high blood pressure are not left out.
- No Pre-medical Test Required: Applicants do not need to appear for a pre-medical test to avail themselves of this policy.
- Affordable Premiums: The Senior Citizens Red Carpet Health Plan provides affordable premiums for senior citizens. They are payable on a monthly, quarterly, half-yearly, annual, biennial (once in 2 years) or triennial (once in 3 years) basis.
Senior Citizen Tax Slab and Benefits
The senior citizen income tax slab is more favourable than the regular tax slabs. For people above 60, the tax slab up to ₹3 lakh is tax-free. The senior citizen tax slab provides the following structure:
- Income up to ₹3 lakh: No tax
- Income between ₹3 lakh and ₹5 lakh: 5% tax
- Income between ₹5 lakh and ₹10 lakh: ₹10,000 + 20% of income above ₹5,00,000
- Income above ₹10 lakh: ₹1,10,000 + 30% of income above ₹10,00,000
The super senior citizen tax slab (above 80 years) provides the following structure:
- Income up to ₹5 lakh: No tax
- Income between ₹5 lakh and ₹10 lakh: 20% of income over ₹5,00,000
- Income over ₹10 lakh: ₹1,00,000 + 30% of income over ₹10,00,000
The exemption allows senior citizens to retain more of their income and spend it on other essential expenses such as health insurance premiums.
Health insurance for senior citizens is a critical investment, providing financial security and access to quality healthcare during their retirement years. With diverse coverage options and tax benefits under Section 80D, it serves as a valuable tool for safeguarding life savings and promoting a worry-free retirement. Understanding the various types of health insurance available, from individual senior-specific plans to family floaters and critical illness coverage, allows seniors to make informed decisions tailored to their unique needs.
