March 01, 2008

Budget 2008: FM prescribes health cover for parents

It pays to get a health cover for not just your spouse and kids, but also for your parents. The government will now allow you an additional deduction of Rs 15,000 if you pay the premium for health cover for your parents. The limit increases to Rs 20,000 if they are senior citizens.

This is how it works: Assume you have paid a mediclaim premium of Rs 15,000 and another premium of Rs 15,000 for your parents. The total tax deduction will now be Rs 30,000. This means that the additional limit will come as an extra benefit.

Till now, the tax deduction could be availed of only for payments of medical insurance for spouse and dependents. Now, even if your parents are not dependents, the benefit of additional tax deduction will be available.

IRDA Chairman CS Rao said this could enhance penetration of health covers among senior citizens and is also an incentive to the industry for introducing more insurance products.

General Insurance Council secretary general KN Bhandari said: “The additional exemption under Section 80D will help expand the health sector where seniors contribute about 40% of total premium income.”

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