Health insurance for parents and seniors may not always be the same thing. Senior citizens may not always be parents, and parents may not always be senior citizens.
Is this confusing? Let’s get back to the basics.
Let’s first understand who are the participants in an insurance contract.
Parties in an Insurance Contract
An insurance policy is a contract between two parties:
The insurer
The insurer is the insurance company that provides the insurance cover.
The Insured Person
The insured person is the person whose medical expenses are being covered by the policy.
There may also be these other parties in an insurance contract.
Other Parties
The Proposer
The proposer is the person who purchases the insurance policy. This person is also referred to as the policyholder. The proposer owns the insurance policy. And is also liable to pay the premium.
The Beneficiary
The beneficiary is the person who is entitled to receive the benefits of the insurance policy. For health insurance, the beneficiary is generally the insured person. But if there is a life insurance component bundled with the policy, things may be different. For the life insurance component, the beneficiary may be another person.
Health Insurance for Senior Citizens
Senior citizens are people over 60 years of age. Senior citizens may opt for senior citizen health insurance plans. These plans are designed to cater to the specific needs of senior citizens.
Parental Insurance
When you purchase an insurance policy for your parents, it falls under health insurance for parents. When you include parents in the family floater plan, it falls under health insurance for parents.
This is because, in both these cases, you are the proposer. You are buying health insurance for your parents.
Parents May Not Be Senior Citizens
When you buy health insurance for your parents, your parents may or may not be senior citizens. So, the policy that you purchase may or may not be a senior citizen health insurance policy. It could be a plain health insurance policy. Or you may include them in your family floater plan.
Senior Citizens May Not Be Parents
In some cases, a senior citizen may or may not be a parent. And while looking for health insurance for themself, they may choose a senior health insurance policy. In this case, they are the proposer.
Tax Benefits
You may be wondering, why are these distinctions so important? The answer is Tax benefits. Tax benefits differ based on the proposer. Let us see what are the tax benefits in each case.
For a Proposer buying Insurance for Self and Family where none are Senior Citizens
Consider a case where you purchase insurance for yourself and your family. If none of the members is senior citizens, you get a deduction of up to ₹25,000/-
For a Proposer buying Insurance for Self and Family where some are Senior Citizen Parents
Consider the case where you purchase insurance for yourself and your family, which includes senior citizen parents. In this case, you can claim an additional tax deduction of upto ₹30,000/-. This additional deduction is available against premium payments for senior health insurance for your parents.
You can also avail of the deduction of up to ₹25,000/- for family premium parents. This is for the non-senior citizen members of your family.
Here, you can claim a total deduction up to ₹25,000 + ₹30,000 = ₹55,000/-.
For a Senior Citizen Proposer buying Insurance for Self and Family where parents are also Senior Citizen Parents
Now, consider a case where a senior citizen proposer is buying insurance for themself and their family. Also, family members include senior citizen parents.
In this case, the proposer can claim a deduction of up to ₹30,000/-. This is against health insurance payments for self and spouse who are senior citizens.
The Proposer can claim an additional deduction against insurance premiums made to cover his senior citizen parents. These claims can be up to ₹30,000/-.
Here, the proposer can claim total deductions of ₹30,000 +₹30,000 = ₹60,000/-
Same Premiums, Different Tax Benefits
We hope the above examples have made the differences between the tax benefits for insurance clear. Consider a family with some senior citizens and some non-senior citizens. The premiums on the health insurance for the family is a certain fixed amount.
Simply by changing the proposers, the tax benefits enjoyed by the family may be different. You may use the above cases to optimize the tax benefits for your family and select the best health insurance for your parents or senior citizens.
Read about Best Health Insurance for Parents here.
Read about the National Senior Citizen Mediclaim Policy by IRDAI here.