Updated February 17th, 2024 at 12:50 IST

Tax incentives not key factor in health insurance purchases: ICICI Lombard Study

Only 30% of respondents in Tier-1 and metro cities, aged 21-55, cited tax benefits as their primary motivation for buying health insurance among 762 surveyed.

Reported by: Business Desk
Health insurance | Image:Pixabay
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Tax benefits not primary: The majority of health insurance buyers are not primarily motivated by tax benefits, according to the latest findings from a survey conducted by ICICI Lombard General Insurance. Out of 762 respondents hailing from Tier-1 and metro cities, aged between 21 and 55, only 30 per cent cited tax exemptions or rebates as the main reason behind their purchase of health insurance policies.

Healthcare priority over taxes

According to the study, individuals are more inclined towards health insurance for reasons such as cashless claim facilities, safeguarding savings, and managing escalating medical costs, rather than being solely driven by tax incentives. The survey revealed that 36 per cent of participants were not even aware of the tax benefits associated with health insurance.

Moreover, the research highlighted that over 60 per cent of respondents relied on advice from friends, family, or bank relationship managers for information on making tax-saving investments. However, younger individuals tend to seek information from public sources.

Premium preference insights

In terms of premium preferences, approximately 63 per cent of those surveyed identified an annual premium range of Rs 8,000 to Rs 30,000 as optimal for an individual health insurance policy. Nonetheless, respondents aged between 36 and 55 were willing to pay slightly more, with over half of them considering Rs 10,000 as the lower end of the preferred range.

Notably, the tax benefits available for health insurance premiums. Individuals under 60 can claim deductions of up to Rs 25,000 for premiums paid for themselves, their spouses, and children, with additional deductions available for premiums paid towards parents' health policies. Moreover, senior citizens or their children paying premiums can claim deductions of up to Rs 50,000 on health insurance premiums.

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Published February 17th, 2024 at 12:50 IST