In today’s fast-paced world, modern nuclear families face a unique set of health and financial challenges. With increasing lifestyle-related ailments, the rise of unpredictable viral infections, and mounting healthcare costs, a single illness in the family can disrupt not just daily routines but also financial stability. Unlike traditional joint families, nuclear households have a limited support system, making it even more important to be prepared for medical emergencies.
Rising hospitalisation costs are a major challenge for the middle class, whose incomes aren’t growing at the same pace. When a child or parent falls sick, it places extra responsibility on the rest of the family, adding to stress. This makes having a health insurance plan essential for financial security and peace of mind.
Key Takeaways
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Emergencies can come anytime, and the emergence of new illnesses makes life even more uncertain. No age group is “safe” from unknown illnesses, and being prepared to face such adversaries is sensible.
As the name implies, this insurance is an umbrella cover that provides coverage for the entire family. It is a single comprehensive health insurance plan with broad features such as preventive health check-ups, cashless hospitalisation option, a fixed premium for a longer term, etc.
The umbrella cover offers a fixed sum insured for the family. Managing multiple policies is also difficult, and there is a possibility of forgetting premium payments, resulting in a lapse of the policy. One single policy is more convenient to manage.
A family cover protects everyone in your family and gives financial protection in times of need, and saves you from the dual stress of managing the illness as well as the costs associated with it.
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There are many advantages of opting for a family health insurance policy. A few good reasons are listed below.
Family health insurance plans are a cost-effective way to cover your entire household under a single policy. With healthcare expenses on the rise, managing medical costs for multiple family members can become overwhelming. Instead of buying separate individual policies for each member, a family floater plan offers comprehensive coverage at a significantly lower combined premium. This makes it an economical solution for families looking to ensure quality healthcare without straining their finances.
Renewing four policies on four different dates can be cumbersome. Maintaining and updating records can add to the woes. If you have a single policy, you can renew it in one go, and the chances of forgetting would be much less. The insurer may provide you with some add-on benefits for opting for a family cover.
You can mention only one single policy for a tax deduction (as against four different policies) while submitting your tax planning file or investment declaration. Amount paid for health insurance coverage is eligible for a deduction under section 80D of the Indian Income Tax Act.
You do not have to buy a new policy when you have a new addition to your family. The baby’s name can be added to the existing policy. You also have the option of adding your parents or in-laws to family health insurance plans.
Additional covers for maternity, accidents and/or critical illnesses are also available so that the insured family gets a lump sum amount for incidental expenses apart from reimbursement of hospitalisation expenses.
The table below showcases the difference between family health insurance plans and individual health insurance plans to make a better decision as per your needs and budgets:
Individual Plan | Family Plan |
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The following exclusions generally apply to both individual and family health insurance plans. It is important to understand these exclusions thoroughly so that you know which expenses will not be covered by your policy. Being aware of them in advance can help you plan your medical finances better and avoid any unexpected claim rejections during times of need.
Insurance, by design, covers the risk of something that is unknown yet. Health insurance is financial protection against any illness that may strike in future. Therefore, the question of covering a “pre-existing”, i.e., a known illness, does not arise. However, for the benefit of customers, some health insurance policies do cover pre-existing health conditions, albeit with a reasonable waiting period.
This is a common exclusion that precludes customers from claiming expenses incurred to undergo a cosmetic change that is not prescribed by medical practitioners. Plastic surgery done only to enhance one’s looks will not be covered, but plastic surgery done post an accident may be covered under a health insurance policy.
Injuries caused due to the attempt to kill oneself are not covered in most health insurance plans.
Treatments availed under Naturopathy, Homoeopathy, etc., may not be covered under standard health insurance plans
Consultations and treatment done in the Outpatient Department are not covered unless these treatments are part of pre-hospitalisation or post-hospitalisation.
Although exclusions are more or less uniform across standard health plans, the inclusions may vary across insurers, the type of policy, the sum insured and premiums payable. Here is a ready reckoner of what is broadly covered under most plans:
Inpatient treatment covers expenses such as surgery, operation theatre costs, nursing charges, anaesthetist's fee, cost of medicines, blood, and oxygen.
Any consultations or investigations done prior to and resulting in hospitalisation are covered under the policy. Similarly, any follow-up consultations, medications and investigations post-hospitalisation are also covered. Both these expenses are covered only for defined timelines (example: 60 days pre and 60 days post hospitalisation)
The cost of ferrying the insured for hospitalisation/admission is covered, albeit there could be upper limits in some policies.
Nowadays, many treatments do not require multiple days of hospitalisation. At the same time, these illnesses are both critical and expensive. Such expenses are covered under health insurance plans.
The total amount spent by Indian households on health and medical-related services in November 2022 was roughly ₹120 billion.
Understanding how tax deductions work on health insurance premiums can help you plan your finances more efficiently. Different scenarios offer different deduction limits based on factors such as the age of insured members and who you are paying the premium for. Let’s look at some common situations to see how you can maximise your tax savings
You can benefit by saving taxes on premium amounts paid because the premium amounts are deductible under section 80D of the Indian Income Tax Act. This is in addition to the deductions claimed under section 80C of the Indian Income Tax Act.
Scenario 1 | |
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Your Age | Below 60 Years |
Parents' Age | Below 60 Years |
Taxable Income | 800,000 |
The premium for Self/family | 25,000 |
Premium for Parents | 25,000 |
Net Taxable Income | 750,000 |
Scenario 2 | |
Your Age | Below 60 Years |
Parents' Age | Above 60 Years |
Taxable Income | 800,000 |
The premium for Self/family | 25,000 |
Premium for Parents | 25,000 |
Net Taxable Income | 750,000 |
You can avail of section 80D deductions for your family and parents separately if you pay both the premiums. This is regardless of the fact that you hold a single policy covering all or multiple.
So, for instance, if you have a single-family health insurance cover for yourself, your spouse, children (below 25 years) and parents, you can avail of 80D benefit twice.
Scenario 3 | |
Your Age | Above 60 Years |
Parents' Age | Above 60 Years |
Taxable Income | 800,000 |
The premium for Self/family | 50,000 |
Premium for Parents | 50,000 |
Net Taxable Income | 700,000 |
Section 80D allows a maximum deduction of up to ₹25,000 when the insured is below 60 years of age. For insureds above 60 years of age, the deduction goes up to ₹50,000. This limit includes preventive medical check-up expenses of up to ₹5000.
You can claim 80D benefit for the senior citizen (for self or parent) even for the medical expenses for specified diseases.
Now, in this new millennium, medical bills are increasing and medical risks are unpredictable. Family medical insurance is a necessity, not a luxury. It ensures your family receives quality medical treatment without breaking your bank. It also gives you peace of mind, knowing that you are prepared for any unforeseen event. There are a number of advantages of family medical insurance, ranging from income tax deduction under Section 80D to the convenience of having one policy for the entire family.
We, at Canara HSBC Life Insurance, understand what your family requires. We offer health insurance which safeguards you against unforeseen medical expenses and safeguards your finances. Make the wise decision to invest in a family health insurance policy today and have a healthier and stress-free future for your family.
Disclaimer - This article is issued in the general public interest and meant for general information purposes only. The views expressed in this blog are solely those of the writer and do not necessarily reflect the official policy or position of Canara HSBC Life Insurance Company Limited or any affiliated entity. We make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the blog or the information, products, services, or related graphics contained in the blog for any purpose. Any reliance you place on such information is therefore strictly at your own risk. You should consult with a qualified professional regarding your specific circumstances before taking any action based on the content provided herein.
