Managing rising medical expenses can be challenging, which is why many families seek ways to reduce costs while maintaining reliable coverage. One of the most common queries is whether health insurance plans for family can also help in saving tax. Under Section 80D of the Income Tax Act, premiums paid for health insurance policies, including those offered by Bajaj General Insurance, qualify for tax deductions. This means you not only protect your family’s health but also lower your taxable income at the same time. Understanding how these benefits work can help you plan smarter, both financially and medically.
Understanding Section 80D: A Quick Overview
Section 80D of the Income Tax Act allows taxpayers to claim deductions on premiums paid for health insurance plans that cover themselves, their spouses, children, and parents. This benefit applies to both individuals and Hindu Undivided Families (HUFs).
Unlike Section 80C, which combines several investments under a single limit, Section 80D provides a separate deduction solely for medical insurance. This makes it an effective and practical way to reduce taxable income while ensuring your family’s healthcare needs are met.
Tax Regime Context: These deductions apply primarily under the old tax regime. Under the new tax regime, most deductions, including Section 80D, are not available unless opted for explicitly.
Who Can Claim the Deduction?
Any resident individual or HUF who pays a premium for a registered medical insurance policy can claim a deduction under Section 80D. If you are the proposer of a health insurance plans for family, you are eligible, even if the insured members are your spouse, children, or dependent parents.
To qualify:
- The payment should be made via non-cash modes such as online transfer, debit card, cheque, UPI, or net banking.
- Cash payments for premiums are not eligible for tax deductions. This applies to premiums paid in the financial year for which the deduction is claimed.
How Much Deduction Can You Claim?
The deduction under Section 80D depends on who is covered and their age. Here’s a clear breakdown:
Category |
Age |
Maximum Deduction (INR) |
Self, spouse, children |
< 60 years |
25,000 |
Parents |
< 60 years |
25,000 |
Combined (self/family <60 & senior parents) |
60+ years |
75,000 |
Parents (senior) |
60+ years |
50,000 |
Preventive Health Check-up Deduction: Up to 5,000 INR for preventive health check-ups is included within the overall limit of Section 80D (self/family or parents), not in addition to it.
Example of Tax Saving
Suppose you are 35 years old and have purchased a Bajaj General family insurance plan covering yourself, your spouse, and two children. You also buy a separate policy for your 65-year-old father.
- Premium paid for family: INR 20,000
- Premium paid for father: INR 35,000
Tax benefit:
- INR 20,000 under Section 80D for your family
- INR 35,000 under Section 80D for a senior citizen parent
Total deduction available: INR 55,000
This reduces your taxable income and helps save tax while ensuring full health coverage.
How to Calculate Your Premium?
To make the most of your health insurance plans for your family and claim tax benefits under Section 80D, it’s essential to select the correct sum insured. A health insurance premium calculator can be a practical tool to estimate the annual premium based on your family’s specific needs.
When using a calculator, you can input details such as:
- Age of family members: Premiums vary with age, so that older members may attract higher costs.
- Number of members: Generally, more members mean a higher premium, but also broader coverage.
- Sum insured and coverage type: The amount of cover you choose directly impacts your premium.
- Pre-policy medical check-ups: Some policies include this, affecting the premium slightly.
Benefits of using a premium calculator:
- Compare premiums quickly for different sum insured options.
- Understand how adding family members impacts the premium.
- Plan finances effectively by estimating your annual premium in advance.
- Get a clear view of how much of your premium is eligible for deduction under Section 80D.
Using a calculator ensures you select the right coverage for your family while optimising both health protection and tax savings.
Additional Benefits with Family Health Care (Silver) Plan
In addition to the tax advantages under Section 80D, the Bajaj General Insurance Family Health Care (Silver) plan provides comprehensive coverage and benefits for the entire family:
- In-patient hospitalisation: Covers costs incurred during hospital stays.
- Pre- and post-hospitalisation expenses: Includes medical costs before and after hospital admission.
- AYUSH treatment coverage: Provides benefits for Ayurvedic, Yoga, Unani, Siddha, and Homoeopathy treatments.
- Organ donor expenses: Financial support for treatment related to organ donation.
- Daycare procedures: Covers treatments that do not require a 24-hour hospital stay.
- Preventive health check-ups every 3 years: This helps in the early detection and management of health conditions.
Cumulative Bonus: The plan also offers a cumulative bonus—if no claims are made during the policy year and the policy is renewed continuously, the sum insured increases by 10% annually, up to a maximum of 50%. This feature depends on the policy terms and is not mandated by law or IRDAI.
Tips to Maximise Your Tax Benefits
- Start early in the financial year: Buy or renew your policy early so that the deduction is reflected in your TDS.
- Cover parents separately: Claim an additional INR 25,000 or INR 50,000, depending on their age.
- Keep all receipts and proof of payment: Premium receipts, payment confirmation, and policy copy are required for tax filing.
- Include preventive check-ups: Deduction up to INR 5,000 is eligible even if your premium is below the limit.
- Use a health insurance premium calculator: Plan premiums and understand exact tax benefits before purchasing the plan.
Final Words
A health insurance plan for family is more than just protection against rising medical expenses; it is also a smart way to save on taxes. Choosing a well-designed policy, such as the Family Health Care (Silver) plan from Bajaj General Insurance, ensures comprehensive coverage for your loved ones while helping reduce your income tax liability under Section 80D. Using a reliable health insurance premium calculator can further guide you in selecting the right coverage, making it easier to balance both financial planning and your family’s healthcare needs throughout the year.
*Standard T&C Apply
**Tax benefits are subject to change in prevalent tax laws.
Claims are subject to terms and conditions set forth under the health insurance policy.
#Visit the official website of IRDAI for further details.