Less than 20% of all Indians are covered under a health insurance. In rural India, 86% of the population is not insured, and 82% of the urban population remains uninsured. Health costs exceeds the average income and saving of families, and therefore health insurance serves to ensure against such rare events. In fact, rural Indians depend mainly on household income and savings for health care expenses (68%) and often borrow money to pay hospital bills (25%). The NSSO survey also found that in 1% of the cases, people sell assets to pay their health care bills. In India ‘out of pocket’ expenses account for the majority of medical spending.
In rural India, the cost of hospitalisation for households is about Rs 15000 on an average and in towns about Rs 24,500.
Key Players in Health Insurance – Government and Private Sector
In India, a substantial proportion of the healthcare is provided by the private sector, mainly because of the poor quality of government health care. However, public insurers (e.g. New India Assurance Co, Oriental Insurance Co, National Insurance Co and United Insurance India) retain almost half of the market share in health insurance. Dominant private insurers include Max Bupa Health Insurance Company Limited, Apollo Munich Health Insurance Company Limited, Star Health and Allied Insurance Co Ltd, Future Generali India Insurance Company Ltd, and Bajaj Allianz General Insurance Co Ltd.
Tax benefits for promoting Health Insurance in India
Insurer gets tax benefits for health insurance under Section 80D of the Income Tax Act. Health insurance premium paid for self, spouse, dependent children or parents qualifies for tax deduction up to Rs.25,000. This limit has been increased from Rs.15,000 from the previous year to Rs.25,000. For medical insurance paid for parents below 60, deduction is up to Rs 25,000. Hence total deduction one can claim is up to Rs 50,000.
In case only one of the parents is over 60, tax benefit of up to Rs 50,000 for medical insurance paid for parents is allowed. Also, premium paid for family (self, spouse and children), enjoys Rs 25,000 deduction. This makes the total deduction available up to Rs 75,000 in a year.
Where one family member (self, spouse or children) is over 60, one can claim up to Rs 50,000 in tax benefit on medical insurance. Additionally for parents over 60, medical insurance paid can fetch up to Rs 50,000 in tax benefit. So, total deduction in this case can be up to Rs 1 lakh a year.
Private players are coming up with OPD coverages as well to lure customers leading to decrease in cost for customers.
A quick snapshot below for reference: –
|MEDICAL INSURANCE PREMIUM PAID FOR||
TOTAL DEDUCTION UNDER SECTION 80D
|SELF, SPOUSE AND DEPENDENT CHILDREN||PARENTS (WHETHER DEPENDENT OR NOT)|
|No one has attained the age of 60 years||₹ 25,000||₹ 25,000||₹ 50,000|
|Insurer and his family is less than 60 years and parents are above 60 years of age||₹ 25,000||₹ 50,000||₹ 75,000|
|Insurer and his parents have attained the age of 60 years and above||₹ 50,000||₹ 50,000||₹ 1,00,000|
So, get yourself and your family insured today by calling / writing us at:
Email – firstname.lastname@example.org
Phone – 9999402945, 965009-2757