5 Reasons to Top Up Your Health Insurance For the New Year!

Health Insurance

The year 2024 is upon is – we are all waiting to celebrate the New Year! While jotting down your to-do lists for the New Year, don’t forget to give thought to your Health Insurance. We are sure you already have health insurance. The real question is – is the insurance enough? Do you need top up health insurance or will your current insurance amount cover emergency bills and hefty medical expenses? In Indian culture, it is considered inauspicious to talk about future ill-health – it is akin to manifesting trouble. But, we know that one medical treatment can set you play havoc with your insurance plans and financial planning. 

A health insurance top up plan can add an extra layer of protection to your mental and financial well-being. Yes, you read that right – additional security will bring you peace of mind and help with medical expenses. 

Now, let’s look at the five reasons why investing in a top-up plan should factor in your financial planning for 2024.

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Increase your insurance amount –

You have a medical policy. You take on a top-up plan, and it means that you are adding more coverage to your current medical policy. If until now, your medical insurance was for Rs 1,00,000 and you take a top-up plan of Rs 50,000. 

Your medical insurance coverage is now 1,50,000. 

Another explanation would be that when you exhaust the insurance amount, the top-up amount would come into play and help cover medical expenses. 

This is the simple way to look at one of the major benefits of a health insurance top up plan. 

Get a lower premium –

In most cases, insurance companies such as Bajaj Allianz offer lower premiums on top-up plans. They may offer a choice of deductible amount, the sum you will insure and flexibility for other features. 

Based on your financial capabilities, you can choose a top-up health insurance plan providing you with the right coverage – it means you avoid paying for unnecessary features. 

For example, opt for a plan that does not have restrictions or sub limits on expenses such as room rent or consultation fees. 

Overall, you are increasing the coverage provided and the deductible amount lowers your liability. 

No need for pre-policy screening  

When you are opting for a top-up plan on your health or medical insurance, it means the insurance company has already screened you before. Therefore, you are not required to undergo another battery of tests to become eligible for the increased insurance. 

We suggest you look at the terms and conditions of the policy because in some cases the pre-screening is limited to people of up to 55 years of age and no adverse medical history. 

Additionally, the top-up may cover pre-existing diseases – this may come into effect after a pre-defined waiting period. 

Tax benefits –

Section 80 D of the Indian Tax Act provides for benefits on the premium paid on your top-up health insurance plan. Depending on the policy, it is possible to avail up to Rs 25,000 per annum as tax deduction against your taxes.

One major restriction to get this benefit is that you, your spouse, parents or children are below 60 years of age. 

The good news is that if you are paying premium for your parents who are above 60, then the maximum health insurance benefit for tax purpose is Rs 50,000 per annum. 

Do note, the tax benefit is subject to change as per the tax laws and central and state government policies. 

Peace of mind – 

As stated earlier in the article, medical expenses can burn a hole in your pocket, leading to stress. In times of medical distress, you do not want to worry about how you will cover a medica expense.

Instead, you want to focus on treating the illness, gearing for a surgery (if required) and ensuring you have enough funds to meet the expense of necessary tests, medicines, consultations and other medical treatments. 

A health insurance top-up plan will bring you peace of mind. It will give you the assurance that you do not need to focus on where the money will come from to meet the varies expenses. 

Instead, it will give your mind the space to focus on important things like focusing on positive thoughts, ensuring you are following the doctor’s orders and more. 

A top-plan will help you focus your energies on the right things in 2024. 

Section 80 D of the Indian Tax Act allows you to deduct the amount you pay for your top-up health insurance plan. Depending on the policy, you may be able to claim a tax deduction of up to Rs 25,000 every year.

One key stipulation for receiving this benefit is that you, your spouse, parents, or children are under the age of 60.

The good news is that if you pay premiums for your parents above the age of 60, the maximum tax-free health insurance benefit is Rs 50,000 per year.

Please keep in mind that the tax advantage is subject to change based on tax laws and federal and state government policies.

Choosing the right health insurance plan

Now that we have discussed the benefits of top-up health insurance, we should also let you know a few things to remember while choosing a plan that will serve its purpose in the New Year:

  1. Don’t believe the salesperson blindly – Ask questions and keep asking them until you are satisfied with the answers
  2. Understand the coverage – Does it cover the disease you are suffering from or have a family history of? Take only those plans that provide you with comprehensive cover
  3. Asks for the costs covered – Pre-hospitalisation, hospitalisation and post-hospitalisation, all come with their fair share of expenses. Make sure you the expenses that are covered
  4. Look for customer centric approach – Read reviews and interact with the customer care to get an idea of how you they will treat you once you have taken the top-up insurance plan

Most important tip – Do not forget to read the terms and conditions carefully before paying the first premium. You need to understand the exclusions, inclusions and limitations to get a top-up plan best suiting your needs in 2024. 

About the author: jennifercaston

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