Mediclaim is not an investment but a necessity for everyone, rich or poor. It guards you against any heavy expenditure that may have to be incurred on medical treatment, in hospitals or at home. Without the cover, when you come face to face with such situations, you have to fall back on your income, which may not be sufficient and therefore, you might be forced to eat into your capital. And the way medical expenses are spiraling, even that may not suffice.
[alert type=”e.g. warning, danger, success, info” title=””] Insured Person ` ` `
Self & his family 21,000
Mother 18,000
Father (very senior) 15,000 33,000 Limited to 30,000
51,000[/alert]
The Finance Act 2015 (FA15) has raised the limits up to which deduction is available under this section on health insurance premia paid, along with expenses incurred on preventive health check-up, by an individual for himself and his family members from `15,000 to `20,000. The additional deduction for covering his/her parents has also been raised from `15,000 to `20,000. In both these cases, if the insured person happens to be a senior citizen, the deduction has been raised from `20,000 to `30,000. However, the aggregate deduction available to any individual in respect of health insurance premia and the medical expenditure incurred is limited to `30,000. Similarly aggregate deduction for covering parents is also limited to `30,000.
Very senior citizens are normally unable to get health insurance. Thankfully, medical expenditure up to `30,000 is deductible if they are not covered by health insurance. A similar deduction is also available to HUF for any of its member.
For clarity, look at the following example —
An individual pays `21,000 as health insurance premium for his family and` 18,000 for his mother. He has also incurred medical expenditure of `15,000 for his father who is a very senior citizen. In that case he is eligible for deduction u/s 80D as follows:
Deduction eligible u/s 80D
The increase in medical insurance limit may not be of much help to those below 40 years of age. For instance, a regular `10-lakh plan costs around `10,000 for a 30-year old. To exhaust the limit, he has to buy top-ups. For a critical illness add-on, the individual will have to shell out about `3,000-`4,000 more, while cover for out-patient department or day-care procedures is another
`2,000-`3,000. Even with these add-ons, the total premium can only be upped to about ` 16,000.
Many individuals either have not understood the importance of preventive check-up or having understood, neglect it because of the cost. Now, this special deduction u/s 80D would prompt one go to doctor regularly. We sincerely hope that this facility will not be misused by obtaining a fake certificate from a friendly doctor.
Now, another difficulty. Can one go to a doctor practising Homeopathy, Ayurveda, Unani, Naturopathy or any complementary and alternative medicines? Clarity is required.
It is better to buy retail or individual health insurance policy when you are young as there are fewer comprehensive health insurance policies available for older people. Some policies offer a cumulative bonus of 50% for every claim-free year. Consequently, even if it is a `10 lakh floater policy, the sum insured doubles at `20 lakh if there are two claim-free years.
Take Care Of The Following
Before buying a health policy, make sure that you do not face a situation where you have a policy that covers a few lakhs but your claim even for `5,000 gets rejected. Most often it is your incorrect understanding of the terms of the policy that is at fault. You must get your agent to explain these terms. Do not take him for granted. Get your understanding attested by the company so that in the event of a dispute for settling any of your claims, your due diligence will come to your rescue.
The following are various aspects you should examine carefully:
Last but not least
Many of the employees find that their employer provides medical cover for the employee as well as his family members. Medical inflation is growing at such a fast rate that this cover may not be adequate. If that be the case, it is advisable to either buy a top-up policy or a fresh policy, which can come into play after the sum insured or coverage under your employer’s policy has been exhausted. A fresh individual health policy is advisable as in case of a job change there may not be any employer provided medical cover in the new employment.
The authors may be contacted at wonderlandconsultants@
yahoo.com