Having a health insurance policy with a sufficient sum insured is needed. How else would you be able to meet the expensive treatment costs of a medical emergency?
When you opt for an optimal sum insured level for complete coverage, you cannot overlook the premium associated with it. If a high sum insured is chosen, the premium, invariably, becomes high. In such cases, you have to choose between an optimal coverage and an affordable premium and the choice is not very easy. What if you can make your health insurance premiums affordable?
There are many ways in which you can save on your health insurance premiums. Let’s find out what these ways are –
- Following a healthy lifestyle
Your health insurance premium is directly proportional to your health and your lifestyle habits. If you practice healthy living and choose healthy lifestyle habits, your premiums would be lower and vice-versa. So, you should maintain your health as premiums for healthy individuals with no medical complications tend to be lower than premiums for individuals suffering from medical problems. Similarly, if you smoke and/or drink, your health insurance premiums would be high as these habits impact your health negatively. That is why health insurance companies charge lower premiums from non-smokers than smokers.
- Wellness benefits offered by insurers
The Insurance Regulatory and Development Authority of India (IRDAI) has asked insurance companies to include wellness benefits in their health insurance policies to promote healthy living. These benefits offer premium discounts if you are healthy or if you practice regular exercising and adopt healthy habits. These benefits also offer discounts on medicines and wellness programs at merchants partnered with the insurer. When buying a health insurance plan, look for these wellness benefits available in the policy and use these benefits to reduce your premium amount.
- Premium discounts
Health insurance plans also allow different types of premium discounts in the policy for making the policy more pocket-friendly. Some of the commonly available discounts include the following –
- Family discount for covering 2 or more members under the policy
- Discount for buying a long term plan for a period of 2 or 3 consecutive years
- Discount for buying the policy online
- Discount for choosing voluntary co-payment under the plan
You can hunt for these discount in the policy and use them to reduce your premium outgoes.
- Avoiding small claims
When you don’t make claims in a policy year, you earn a no claim bonus. This bonus either increases the sum insured free of cost or it allows a discount in the renewal premium. So, during the policy year, if you incur small medical expenses, don’t make claims for such expenses. Avoidance of claims would help you avail no claim bonus and either get a higher sum insured at the same premium or a premium discount on renewal.
- Splitting the premium between spouses
Health insurance premiums are allowed as a deduction from your taxable income up to INR 25,000 under Section 80D of the Income Tax Act, 1961. If, however, your health insurance premium is more than INR 25,000, you can split the premium with your spouse and claim double tax benefits. This splitting is allowed if the premium of the policy is paid through two bank accounts. In that case, the insurance company might issue two tax certificates allowing you and your spouse to claim a deduction from your respective taxable incomes. For instance, say your aggregate health insurance premium works out to be INR 35,000. In this case, you can pay INR 25,000 from your bank account and ask your spouse to pay the remaining INR 10,000 from his/her bank account. This way, you can claim a deduction of INR 25,000 under Section 80D from your taxable income and your spouse can claim a deduction of INR 10,000 from his/her taxable income. This splitting would, therefore, give you higher tax deductions and reduce your tax liability.
Premium splitting might or might not be allowed by insurance companies. So, find out from your insurer whether it would allow such splitting and provide you with two tax certificates so that you can claim dual deductions on a single policy. (Source ET article)
- Choosing a super top-up plan
To enjoy a high cover at a low premium you can opt for a super top-up health plan. The plan comes with a sum insured and a deductible limit. If the aggregate claims made in a policy year exceed the deductible limit, the excess claims are paid by the super top-up plan. A super top-up policy can act as a supplemental coverage on an existing plan. The deductible of the plan can be taken to match the existing coverage of your policy so that claims up to the deductible get paid by the existing health plan and excess claims get covered by the super top-up plan. A super top-up plan, therefore, is a good choice for increasing your coverage while reducing the premium cost.
Which of these ways would you choose to reduce your health insurance premium?
You can choose one or all of the ways mentioned above but do be smart about buying your health insurance policy. A high sum insured doesn’t always mean a high premium and you can use the above-mentioned steps to reduce the premium effectively. To enhance the sum insured, opt for super top-up plans and get comprehensive coverage which is also light on your pockets.
Watch the below video to find out more ways on how you can lower your health insurance premiums.
