Medical expenses in India are high and at times prohibitive, especially so when a critical illness such as cancer strikes. While high-income earners and those employed in the organized sector can afford medical expenses, others may find it difficult to manage the high cost of medical expenses. While in most countries health insurance plays an important role in mitigating the hardships faced by people in coping with medical expenses, health insurance in India is still evolving.

Many health insurance companies offer health insurance policies that provide protection to the insured in case the insured suffers from health issues. These policies help the insured to meet the cost of treatment and in cases provide lump sum benefits subject to certain conditions. The stakeholders in the health industry like the insurers, hospitals / medical diagnostic centres along with third party administrators (TPA), come together to provide health services in a seamless manner

In support of the evolving health insurance industry in India and the under penetration of health insurance covers, the Income-tax Act offers incentives in the form of tax breaks to people taking health insurance policies

The Act specifies benefits for taking health insurance for individuals and their families under Section 80D in the form of a deduction from income before calculating income-tax

For Individuals

The benefit is available to insure individuals, their spouses, children and parents. The deduction under Section 80D is available to individuals subject to the following limits and conditions

• Rs 25,000 for insuring individuals, their spouses and children if the individual is below 60 years of age (this goes up to Rs 30,000 if the individual is above 60)
• An additional Rs 25,000 for insuring parents of individuals if the parents are below 60 years of age (this goes up to Rs 30,000 if the individual is above 60)

Deduction is available only for payments made in modes other than cash.

Hence the maximum deduction available to individuals is Rs 60,000 if the insured and their parents are both above 60 years of age. If the individual is not a senior citizen but has senior citizen parents, the deduction available is Rs 55,000. At a 30.9% tax rate on this, one can save up to Rs 16,995 on tax.

Deduction available for premiums paid on health insurance policies from health insurance or life insurance companies

The deduction under Section 80D for health insurance is available for premiums paid to health insurance policies from health insurance companies or life insurance companies. Even the premiums paid to life insurance companies towards medical insurance or critical insurance riders also qualify for deduction under Section 80D. Further, premiums paid for any defined benefit such as critical illness plan or daily hospital cash plan of any health insurance or life insurance company qualify for deduction under Section 80D.

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Tax saving calculations shown are for illustrative purposes only. Actual benefit will vary from person to person. The user/investor needs to verify all the facts and circumstances with the prevailing tax statutes and seek appropriate professional advice before acting on the basis of the above information. Tax laws are subject to amendments from time to time.

Standard Chartered Bank, India having its corporate office at Crescenzo Building C-38/C-39 G Block, Bandra Kurla Complex, Bandra (East), Mumbai – 400051 is a licensed Corporate Agent of Royal Sundaram General Insurance Co. Limited for general insurance products and Max Bupa Health Insurance Company Limited for standalone health insurance products vide composite license number CA0028. All insurance products are underwritten by the respective insurance companies. The benefits/ features of the products are indicative only. For more details on risk factors and terms and conditions, please read sales brochure carefully before concluding sale. Insurance is the subject matter of solicitation.

Max Bupa Health Insurance Company Limited IRDAI Registration No.145 CIN No. U66000DL2008PLC182918. Registered Office: Max House, 1 Dr. Jha Marg, Okhla, New Delhi – 110020 Fax: +91 11 30902010. Toll free: 1800-3010-3333. www.maxbupa.com

Royal Sundaram General Insurance Co. Limited (formerly known as Royal Sundaram Alliance Insurance Company Limited) Vishranthi Melaram Towers, No.2/319 , Rajiv Gandhi Salai (OMR), Karapakkam, Chennai – 600097. IRDAI Registration No. 102. CIN: U67200TN2000PLC045611. Phone: 1860 425 0000 www.royalsundaram.in