Chola Tax Plus Healthline: Meant for policyholders keen on maximising tax breaks
MUMBAI: Private sector general insurer Cholamandalam MS has recently launched a new health policy – Chola Tax Plus Healthline – targetted at policyholders looking to exhaust the maximum tax deduction of Rs 35,000 available under section 80D.
One can claim tax deduction of Rs 15,000 for premiums paid for yourself, spouse and children and another Rs 15,000 if you pay your parents’ health premiums. If your parents happen to be senior citizens, the limit is Rs 20,000. However, not many are able to fully ‘utilise’ this limit, as their premiums fall short of this mark.
Therefore, companies like ICICIBSE 1.31 % Lombard, Apollo Munich and now Cholamandalam have introduced products that pay for outpatient department treatment procedures, dental expenses, doctors’ consultation fees and so on, besides the regular hospitalisation expenses. Tax Plus Healthline, too, falls in the same category.
The OPD section in the policy covers expenses incurred on doctor’s fee, vaccines, spectacles, dental expenses, lab tests and medicines taken as an outpatient. Alternative forms of medicine like Ayurveda and Homeopathy are also covered for claiming benefits under this section. Unlike some other plans, there are no sub-limits on OPD expenses.
On the flipside, if you do not have to consult a doctor or visit a dentist during a year, you will have under-utilised the product’s features. For instance, say your premium under a regular policy would have amounted to Rs 4,000, but you are paying Rs 15,000 under this product. Now, if you do not incur costs up to Rs 11,000 on consultation, dental treatment and so on in a particular year, you would have paid additional premium without deriving any ‘benefits’ in return.
Upside: It will appeal to individuals whose main aim is to make the most of tax benefits under section 80D and get reimbursement for expenses incurred on consultation, dental treatment etc. Also, there are no sub-limits on admissible OPD expenses.
Downside: The additional premium paid on these policies could equal the actual OPD expenses incurred during some years, defeating the purpose of buying such a policy. Instead, parking the additional amount in short-term FDs or liquid funds might work out to be a better idea.