An important component of financial planning is health coverage. You must procure adequate health insurance to prevent financial stress in case of a medical emergency. Healthcare costs are rising every day due to the inflationary pressure. Without sufficient health coverage, you may be unable to afford the costs when the need arises.
An individual health plan covers only you and the benefits are available only if you suffer from any of the included conditions. On the other hand, a family floater plan covers your entire family. A single policy covers the family and eliminates the hassle of maintaining individual plans for different family members. Moreover, a family floater plan is more affordable.
Features of a family floater plan
- A wide range of day care procedures are covered
- Cashless services within the network facilities
- Flexibility to choose room and treatment zone
- Emergency assistance across several locations
Benefits of a family floater plan
- A family floater plan offers health insurance coverage for self, spouse, children, and parents. Some plans may allow you to include coverage for your in-laws too.
- Several insurance companies offer special rewards for living and maintaining a healthy lifestyle. A family floater offers such rewards to each of the included members.
- Most insurance companies offer discounts on the premium when you opt for a family floater plan. This makes it easier to ensure sufficient health coverage for all your loved ones at an affordable cost.
Types of family floater insurance plans
Based on the terms and conditions of the plans, the family floater insurance offers coverage to you and your family. A health insurance plan may be classified into two categories depending on the kind of coverage available.
- Medical insurance
Such an insurance plan reimburses all hospitalization expenses limited to the healthcare treatment. In case you receive treatment within the network hospitals, you enjoy cashless services whereby the insurer directly bears all costs.
- Critical illness insurance
This type of health insurance plan protects you and your family against severe conditions such as kidney failure, heart attack, strokes, and others. You will receive the entire sum assured subject to the plan coverage and other terms and conditions.
In addition to the aforementioned features and benefits, health insurance plans have another huge advantage. You receive tax benefits under section 80D medical insurance clause. Here are more details about this tax advantage.
Tax benefits of health insurance
- An amount of INR 25,000 per annum paid, as the premium is deductible as the section 80D health insurance tax exemption. If either you or your spouse is a senior citizen (over 60 years old), this exempt amount increases to INR 30,000 per year.
- Additionally, the costs incurred for annual preventive health checkups are tax deductible. The aforementioned INR 25,000 per annum or INR 30,000 per year for seniors includes up to INR 5,000 per annum as an additional tax benefit of health insurance towards preventive health checkups.
- Further, medical insurance premium paid for your parents is also tax deductible. The maximum deduction is limited to INR 25,000 per annum. However, if either one of your parents is over 60 years old, the tax benefit of health insurance increases to INR 30,000 per year.
- Lastly, it is important to note that in the recently announced Budget 2018, the tax exemption amount for insurance premium paid for senior citizens has been increased from INR 30,000 to INR 50,000. This change will come into effect from Assessment Year 2019-20 onwards.
You must remember that no tax benefit is available on premium paid to procure health insurance coverage for your siblings. Similarly, if you pay the premium on behalf of your in-laws, section 80D medical insurance benefits are not available.
Exclusions under section 80D
To avail tax benefits under section 80D, the premium must be paid by you and not by any third party. Moreover, if the premium is paid in cash, the benefit is not available. However, if the preventive health checkup expenses are paid in cash, the health insurance tax exemption is still available.
Health insurance is important to protect you and your loved ones in case of any medical emergency. Several insurance companies provide different types of plans and it is recommended you evaluate the various options before making your choice.
