What are the variations available in health plans in terms of extra coverage?
There are a wide range of unique and innovative health insurance plans that cover much more than basic hospitalisation. From the popular family floater plan on ‘indemnity’ basis, where the insured is reimbursed costs incurred to policies covering outpatient expenses, to policies providing specialised cover for critical illness, the choices are wide. There are 22 general insurance and standalone health insurance companies offering a variety of health insurance plans.
I recently brought a health cover for my mother. I paid Rs 24,000 towards the comprehensive cover. She turned 61, two months after the policy was issued in December 2011. What is the tax treatment for this financial year?
You are eligible for claiming tax deductions under Section 80D of the Income Tax Act against the health insurance premium that you have paid. The tax deduction is Rs 15,000 if your parents are up to 60 years of age, or Rs 20,000 if they are older. In your case, you can claim a tax deduction of Rs 20,000 for FY12.
Could you guide me on the changes if I switch to a new insurer? I am also planning to go for a knee surgery towards the end of this year.
The recent norms of health portability have made health insurance more customer-friendly. The new guidelines allow you to get credit for the time already spent for covering pre-existing diseases, along with bonus accruing to you from past insurers. The features of the previous policy are not transferable. Hence, you should choose a policy that closely matches the existing one. Portability will enable transfer of the credit gained by you for pre-existing conditions and time-bound exclusions, if you choose to switch from one insurer to another (or from one plan to another of the same insurer), provided the previous policy has been maintained without any break.
Since insurance is a long-term contract, you should evaluate the existing insurance for any marked difference in features and service, and only then think of porting to the new policy. Premiums on a standalone basis should not be the determining factor. You should ensure the new insurance company you are porting to covers knee surgery. The normal waiting period for knee surgery is two years. Since you have already completed it, you will get the continuity benefit with the new insurer.
The writer is the MD & CEO, ICICI Lombard General Insurance. Views expressed are his own.
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