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Insurance

Millennials should consider these things before buying a health insurance policy

I am 25 years old and planning to buy a health insurance policy for myself. I work with an MNC and have no pre-existing diseases. Please suggest what are the major things I should keep in mind while buying health insurance for myself.

Akash

Hi Akash. It’s a very good decision that you are planning to buy a health insurance policy at this age. Health insurance is one of the most important factors to secure yourself from uncertainties of health.

Considering you would want to buy an individual health insurance cover, the first and foremost thing you should consider before buying is the cover you need. Keeping in mind the uncertainties and medical inflation, a cover of at least 10-15 lakhs per person is advisable. However, it is best to have the maximum coverage that you can afford.

Insurers have also developed special health plans that are a combination of Base Plan and Super Top-up plans in the last two years. These plans are significantly less expensive while providing the most comprehensive coverage available. However, apart from purchasing higher-sum-insured health insurance plans, customers can also increase their sum insured by investing in Super Top-up plans – a convenient and cost-effective way of increasing your health coverage.

The second most important thing is clauses and limitations. Several insurers often impose a mandatory co-payment and sub-limits clause on the health cover when you buy a health insurance policy in an attempt to reduce the premium. While this may reduce your premium to some extent, it will cost you dearly if you need to file a claim.

The third most important thing is to check the network hospital list. It enables you to receive cashless treatment. Under the cashless feature, you can receive treatment at any of the network hospitals without having to pay anything out of pocket. Also, since you are young, you can also look at features like wellness benefits, Ayurveda/AYUSH treatments and OPD, etc.

I have had a health insurance policy for the past 10 years now. In the previous year ended on 31 March 2022, I paid a total premium of 56,000. I turned 60 on 15 May 2022. I want to know how many deductions I will be entitled to under 80D for the previous financial year.

Atul

Hi Atul, Since you turned 60 after 31st March 2022, you will be entitled to a deduction of only 25,000 under section 80D. However, please note that from the next financial year, you will be eligible to get the deduction of Rs. 50,000 under the same section. In a fiscal year, the deduction allowed under Section 80D is 25,000. The maximum deduction allowed for senior citizens is 50,000. Individuals can claim a deduction of up to 25,000 for insurance on themselves, their spouses, and their dependent children.

Queries answered by Sanjiv Bajaj, joint chairman & MD, Bajaj Capital Ltd.

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