Health insurance premium for parents is tax deductible

Published in Mint on 1st April 2014, Written by Kapil Mehta
Does a comprehensive motor insurance policy cover towing charges?
—Piyush
The practice varies across insurance companies. Increasingly, insurers are picking up these costs and, in fact, even arrange for the tow. Some insurers put limits on the cost they will incur. For example, costs over the first 50km need to be paid by the policyholder or are capped at an absolute amount.
My father has a health insurance policy for which I pay the premiums. Can I get extra tax benefits? My father has the policy in his name and so far he was paying the premium. I have decided to pay his premiums from this year onwards.
—Vandana Singh
For the premium that you pay for your father, you can claim up to Rs.15,000 as additional income deduction under section 80D of the Income-tax Act. If your father is over 60, then you can claim up to Rs.20,000 as income deduction.
What are the requirements for a basic overseas mediclaim?
—Charles Issac
There are three simple requirements. First, you should be a resident Indian and have a valid passport and visa. Second, you should fall within the allowed age bracket, which is generally 6 months to 80 years. Finally, your travel trip must be less than 180 days. These are not hard and fast rules and insurers do make exceptions when requested. For example, people over 80 can be covered. Extensions beyond 180 day are possible on request, and so on.
My sister and I are 24 and 27 years old, respectively. We want to add ourselves into our mother’s medical insurance. Can we do that?
—N. Verma
Unfortunately, most insurers will not allow you to be included in your mother’s policy because both of you are over 21 years of age. Instead, buy yourself an individual health insurance. It will be equally cost effective.
I purchased a contractor’s all risk policy for my home that was under construction. Unfortunately, the basement collapsed. Can I claim for this?
—Arindam D.
There are two questions. First, whether the claim is admissible and second, the amount that can be claimed. Admissibility depends upon the root cause for the collapse. If this was caused by an accident then the claim is payable. If faulty design or material was the issue then the claim is not payable. The claim amount depends upon whether you bought a market or reinstatement value insurance. In market value, the insurer will pay the depreciated book value of the damaged portion to you. However, in reinstatement value insurances you will be paid the cost of reconstruction.

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