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It is advised to get insured early as with age, risks go up and hence, the premium Investors can claim tax rebate on investment up to Rs 30,000 towards health insurance Beginning April 1, you can claim deduction up to Rs 5,000 spent of health checkups under Section 80D Portability allows a policyholder to shift from one insurer to another along with accrued benefits  It is not mandatory for a person to have a health insurance policy to claim Rs 5,000 deduction on health checkup

WITH the advent of new financial year, it's the time to relook at your investment goals and strategies. Adequate life and health insurance cover should be on the mind of all individuals, especially those, who have financial responsibilities.


Healthcare inflation has led to cost of medical treatment shooting through the roof.
Careful planning and investment in the right products can save you from any financial trouble in future.

While it is good if you are optimistic and believe that there's still a lot of time on hand to plan for future, but one should be practical.


Health insurance: Buy a standard health insurance plan or mediclaim policy, as it is more commonly known.

Choose adequate cover depending upon the present and future cost of medical treatment. Earlier you buy health insurance, lower will be the premium. With age, risks go up and, hence, the premium. To a 30-year-old male, most health insurance providers charge Rs 7,000-8,000 for health cover of Rs 5 lakh.


Critical illness insurance: Buy a standalone critical illness cover or rider from a life or general insurance company. Critical illness cover includes lump sum payment in case one is diagnosed with major ailments listed in the policy.

Most insurance companies cover serious ailments such as heart attack, cancer, stroke and renal failure in the critical illness cover.


Premium for such plan is low compared with standard health insurance plan. To a 30-year-old male, critical illness premium charged for Rs 5 lakh will be Rs 1,300-1,500.

Health insurance segment is growing at a very rapid pace, and critical illness is estimated to be growing at around 20-25 per cent. Although this growth has been there for quite sometime, we expect this trend to continue for next few years as well. Generally, there are two types of critical illness policies available in the market. One is the add-on policy, which is sold with the basic mediclaim, and other a standalone policy which is bought by the customer as per his needs.

Top-up cover: If you already have a health insurance cover and want to increase the sum assured, you can also top-up and buy extra cover. Get in touch with the insurance company to know if they provide a top-up insurance plan. Premium for a top-up cover is lower than buying a new standard health insurance policy.

Top-up health insurance suits those policyholders who are already covered under their employer's mediclaim policy or have their own health insurance with low sum assured.

Policyholders who have an existing policy and are renewing it year-after-year, might be enjoying a good no-claim bonus. For these people, a top-up cover helps in increasing the sum assured without paying a huge premium that they may have to otherwise fork out for a new health insurance plan. Corporate insurance policyholders are also inclined to buy top-up plans if they feel that their existing coverage might not be sufficient.

This concept works as a buffer, since it is only at times of severe illness that people need huge sum insured. In normal hospitalisation cases, plain vanilla health insurance plans are sufficient.

Portability: Beginning October 2011, the insurance regulator Irda (Insurance Regulatory and Development Authority) allowed portability of health insurance. In health insurance portability, on renewal, a policyholder can shift to another insurance company along with accrued benefits such as no claim bonus, waiting period for pre-existing disease.

All policyholders who want to shift to another insurer will have to inform his or her insurance company at least 45 days prior to renewal date. Portability is applicable to all individual health insurance policyholders issued by non-life insurance company.

Tax concessions: Apart from peace of mind, investment in health insurance will also entitle you to claim tax rebate under the Section 80D of the Income Tax Act.

Investors can claim tax rebate on investment up to Rs 30,000 towards health insurance. Under Section 80D, a person can claim deduction up to Rs 15,000 for a policy that covers him, his spouse and children. Deduction of up to Rs 15,000 is allowed on health cover for his parents. The deduction goes up by additional Rs 5,000 if parents are senior citizens.

Beginning April 1, you can claim deduction up to Rs 5,000 spent of health checkups under Section 80D. This deduction is allowed in the existing window for health insurance rebate. This is a new incentive offered by the finance minister in the Union budget.

The move to bring preventive health checkup under Section 80D is a very positive move. However, it is not mandatory for a person to have a health insurance policy to claim this deduction. We are working on figuring out ways of either incorporating this feature it in to health insurance product or to have special tie-up with hospitals and diagnostic centers to get more tests done at a reduced cost. If new products are created, then that needs to be approved by the regulator. If tie-ups are made with medical centers then the insurance company may ask them to provide special discounts on health checkups.

Preventive health checkup will help insurance company in better risk management as they will be already aware of the risk that they are taking by insuring the policyholder. Secondly, it will reduce the claims as well, since policyholders will be aware of their own medical condition.

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Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.

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Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )

  1. HDFC TaxSaver
  2. ICICI Prudential Tax Plan
  3. DSP BlackRock Tax Saver Fund
  4. Birla Sun Life Tax Relief '96
  5. Reliance Tax Saver (ELSS) Fund
  6. IDFC Tax Advantage (ELSS) Fund
  7. SBI Magnum Tax Gain Scheme 1993
  8. Sundaram Tax Saver

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