Scenarios in which you will not be eligible to claim tax benefits on your health insurance policy

While getting tax benefits can be a great motivation to buy health insurance, you need to be aware that there are certain situations in which you will not be able to claim any benefits even if you have paid the due premium. As per section 80D of the Income Tax Act, the maximum limit of tax deduction that you can claim is Rs 25,000 for individuals, and for senior citizens, this limit is Rs 50,000. However, if you read the terms and conditions carefully, you will come across at least five situations in which you will not be eligible to claim tax benefits on health insurance. They are as follows:

Nowadays, most insurance companies are offering health insurance policies spanning two or more years. If you buy such a policy which is valid for more than a year and pay the premium in a lump sum, you will be eligible to claim tax benefits only for the assessment year in which you paid the health insurance premium. So, even though your policy may be valid for the subsequent years, you will be paying no premium and therefore you will not get any income tax deductions for the subsequent years.

You can claim tax benefits only on health insurance policies taken for yourself, your spouse, and dependent children and parents. Therefore, if you pay the health insurance premium for anyone other than those specified, you will not be eligible to claim any income tax rebate on it.

During the course of the assessment year, you will have to submit proof of premium paid on health insurance policies to your employers to be eligible to claim income tax deductions. If you fail to do so, you will not be able to claim the benefits which you are eligible to under section 80D of the Income Tax Act.

If you are under the impression that you can claim tax sops for the health insurance policy of your independent children, you would be in for a shock. You can claim the tax benefit u/s 80D only as long as the child is dependent on you.

A majority of health insurance plans have a validity of one year and have to be renewed on or before the last date, failing which you will not be eligible to claim the tax benefits of health insurance. If you are planning to buy medical insurance for yourself, your spouse or parents, do go through the health insurance plans offered by Bharti AXA as they have some very comprehensive plans at very competitive premiums rates.