Budgeting your health insurance premium is one of the most important things to keep your financial plans intact. Health insurance provides the specific protection that you and your family need ensuring you are covered when there is an emergency. However, the cost that you have to spend on paying premiums can be a bit unrealistic if not planned properly.
When you develop a budget or strategy that works for you, you are better able to accommodate payment for your health insurance premium. Below are some useful tips to help you prepare and manage your health insurance premium, making it a manageable part of your yearly expenses.
Understanding Health Insurance Premiums
A health insurance premium is a periodic payment to maintain coverage. It has become a necessity for both you and your family, as no one wants to face medical bills without insurance. Premiums can vary greatly depending on policy type, age, medical condition, and coverage options, but they are the basic containers within which your health protection is carried. Therefore, knowing how to budget effectively for them is key.
Prioritise Health Insurance Premiums in Your Budget
One of the most effective health insurance cost management measures is to put it at the top of your must-pay list. Whether it takes on the nature of a monthly or annual expense, make sure that a proportionate amount is worked into those calculations. Setting aside a dedicated portion of your income for this purpose will ensure that you’re always prepared when the payment is due.
- Evaluate Your Monthly Income and Expenses: Divide your budget carefully into categories. Evaluate what proportion of income can be set aside for insurance.
- Set Priorities: Make sure health insurance premium is one of your highest priorities, placed above agreements to skip rent or pay creditors late.
Choose the Right Plan for Your Budget
When selecting a health insurance plan, it’s important to opt for one that suits your financial situation. Many people mistakenly choose plans with low premiums but end up paying more in out-of-pocket costs later. Instead, balance your health insurance premium with the level of coverage provided.
- Co-Payments and Deductibles: Some plans offer lower premiums but require higher co-payments and deductibles when you need care. Ensure you strike a balance between the two.
- Comprehensive Coverage: A slightly higher health insurance monthly premium can often provide more extensive coverage, ultimately saving you money in the long run.
- Family Versus Individual Plans: If you’re insuring multiple family members, family plans may offer better value compared to individual plans.
Save on Health Insurance Monthly Premiums with Preventive Care
Preventive care can significantly reduce your overall healthcare costs. Numerous health insurers reward individuals who lead a healthy lifestyle by exempting them from incurring high premiums. Here’s how you can make preventive care work in your favour:
- Regular Health Screenings: It is believed that early diagnosis of any health-related issues is of immense significance, as it avoids incurring enhanced premium costs exposed later on by your insurance provider.
- Gym and Wellness Centres Rewards: Most health insurance extend their initiatives to such enterprises to promote health and wellness by offering an array of services.
- Smoking and Weight Loss Programmes: Joining these can also help you to get discounts on your premiums.
Use Tax Benefits to Your Advantage
The premiums for your health insurance can be claimed as a deduction under section 80D of the Income Tax Act. Opting for these tax benefits will substantially cut down the financial impact associated with medical insurance premium payments for your policy. You can claim a deduction on individual and family policies of up to ₹25,000 for yourself, your spouse, and your children.
If you are also insuring your parents aged 60 years and above, then you can claim an extra deduction of up to ₹50,000. Preventive health check-ups – the expense that arises from using preventive health check-ups is eligible for deductions of up to ₹5000. By maximising the tax benefits, you will end up spending far less on insurance covers in general.
Smart Budgeting Ensures Peace of Mind
It’s easier than it seems to budget your health insurance premium. If you make it a priority, stick with the most appropriate option, and use tax exemptions, you’ll save on a health insurance policy. Besides, if you check your policy often and keep some funds for emergencies, your plan will be financially stronger.
Financial planning enables you to handle your medical insurance premium, securing coverage for yourself and your family. Insurance providers such as Canara HSBC Life Insurance have a variety of affordable and reliable plans.