Budget 2015 & your insurance

Over the years we have tried to give you various reasons to take health insurance for yourself and your family. If all those reasons were not enough to convince you, here is one more!

Union budget 2015 has increased the tax deduction limit of up to Rs 25,000 from the current Rs.15, 000 per year under Section 80 C. And when your senior citizen parents take health insurance policies the tax exemption they get is for Rs. 30,000 per year from the earlier Rs.20, 000. It simply means that the premium amount you pay towards your health policy renewal or fresh would be exempt from tax upto the limit specified!

For very senior citizens (read above 80yrs) who are not covered by health insurance, government has proposed that a deduction of Rs 30,000 will be given for treatment expenses. This is offered as many health insurance plans used to expire or still expire once the insured reaches the age of 80yrs. Deductions under expenditure towards specified diseases of serious nature is proposed to be enhanced by Rs 20,000 to Rs 80,000 for very senior citizens.

The insurance industry has welcomed this move saying that this will enable the health insurance sector to grow further in the coming year. More importantly, we should realize that the Government is urging us to take health insurance by offering tax benefits because of the fact that India when compared to other countries has very low insurance coverage.  In a country with more than 1 billion citizens, only 17% is covered under some sort of health insurance scheme as per the 2014 March data figures provided by IRDA.

The country’s public financing (government funded) for health care is less than 1 per cent of the world’s total health expenditure, even though it has 16% of the world’s population according to the World Bank estimates. The World Bank report further states that a majority of the population meets almost 70% of their health expenses out of their own pocket. This places considerable financial burden on poor households, often pushing them deeper into poverty.

If we have not still convinced you about taking a health plan for you and your dependents, we don’t know what will!