Here’s how you can buy health insurance for your parents and claim tax-saving benefits at work

One of the most important steps in insuring your parents is purchasing health insurance policies in their names that provide them extensive coverage and carry tax benefits under Section 80D of the Income Tax Act for you. This piece will help you understand how you can do this.

You should identify the health insurance needs of your parents. Consider aspects like their age, existing health conditions, and medical history. Once you have a clear picture of what you are looking for, you should look out for policies available online. Choose a health insurance policy that is specifically designed for your parents from a credible insurance provider. Check the specifications of the policy, the illnesses it covers, terms and conditions, and premium costs. After choosing the policy that fits the bill, buy it in your parents’ names.

“Upon the policy issuance, the policy and tax receipt are emailed to the policyholder. This approach makes buying insurance online a simple and efficient process,” said Siddharth Singhal, Business Head - Health Insurance at Policybazaar.com.

Under Section 80D of the Income Tax Act, you are allowed to claim a tax deduction on the premiums paid for your parent’s health insurance. If your parents are aged below 60, you can claim a deduction of up to Rs 25,000 and if they are above 60, the maximum deduction goes up to Rs 50,000.

Singhal says, "The individual responsible for paying the premium is termed as the proposer, while the insured member is the one who is covered by the insurance policy. When it comes to purchasing a policy for parents, anyone can act as the proposer. However, it is important to know that only the proposer is eligible to claim tax benefits associated with premium payments"

So, to buy a health insurance policy for your parents and be able to claim the premiums, ensure that the policy is in your parents' names.

Echoing similar views, Naval Goel, Founder and CEO of PolicyX.com, said, "If you buy a senior citizen plan for your parents, then you are said to be the proposer of the policy, and the premium receipts will be issued in your name. You can purchase a senior citizens plan for your elderly parents in your name and take benefit of the tax exemptions on paying the premiums of the plan. If the age of the insured is 60 or above 60 years, then you can get a deduction of up to Rs 50,000."

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Thus, to claim this tax benefit, keeping a record of the premium payment is crucial. Collect the premium paid certificate from the insurer, which should specify your name, premium amount, the name of your parents, policy number, and the period of coverage. Submit this at your office to benefit from tax deduction savings benefit.

"An individual can only claim premiums at his office if the organisation he is working for allows the reimbursement of the health insurance premiums. Apart from this, if the individual has added his parents to his corporate policy, the company will bear the premiums," added Goel.