If there’s no cover for parents under your company policy, you’re missing a separate tax deduction. Buy your parents their own health policy, and you can claim up to ₹25,000 more each year. That goes up to ₹50,000 if either parent is 60 or older. This amount is in addition to the limit for your own family.
Why Company Policies Often Leave Parents Out
Group health cover is built around the employee. Parents are often left out, or they come in only as a costly add-on.
Many company policies cover you, your spouse and your children. Some don’t include parents at all. Others let you add them only if you pay extra from your salary. Even when parents are included, the cover usually ends the day you leave the job. That’s a real risk for retired parents, who find it harder to get new cover as they get older. This is why many employees buy an individual health policy for each parent, so the cover doesn’t depend on their job.
The Tax Benefit You’re Missing
The tax law gives parents a limit of their own. This is a second deduction, separate from the one for your family.
From the financial year 2026-27 (AY 2027-28), you will claim this deduction under Section 126 of the Income Tax Act, 2025, which has replaced Section 80D. For returns from earlier years, Section 80D still applies.
Either way, the limits are:
● Up to ₹25,000 a year for yourself, your spouse and children, or ₹50,000 if you or your spouse is 60 or older
● Up to ₹25,000 for your parents’ health insurance, or ₹50,000 if either parent is a senior citizen
● Up to ₹5,000 for preventive health check-ups, counted within these limits
So if you’re under 60 and your parents are seniors, you can claim up to ₹75,000 a year. In the 30% slab, the ₹50,000 for your parents alone saves you about ₹15,600 in tax, including cess.
How to Claim the Parents’ Deduction
You get the deduction for money you pay, not for covering what your employer pays for. Make sure the premium comes from your own account.
● Pay by card, UPI, net banking or cheque. Cash doesn’t qualify, except for health check-ups.
● Keep the premium receipt. Make sure it shows the insured person’s name.
● If you pay extra to add your parents to your company policy, ask HR for a certificate showing how much was deducted from your salary. You can claim that amount.
● You can claim the deduction only if you’ve opted out of the default tax regime.
Buying a Separate Policy for Your Parents
A separate policy protects your parents, whatever happens with your job. It also gives you a clean premium receipt for your tax claim.
When each parent has their sum insured, a big claim for one of them won’t use up cover meant for anyone else. Look closely at three things: the co-payment clause, room rent limits and the waiting period for existing conditions. IRDAI caps the pre-existing disease waiting period at 36 months. Buying early means that the waiting period ends sooner.
If a parent has a history of serious illness, read the policy wording before you buy. A parent who has had cancer needs special care here. When you compare health insurance for pre-existing cancer in India, check whether the plan covers a cancer diagnosed before you bought it. Many cancer-specific plans exclude existing signs or symptoms.
Others have entry age limits or an initial waiting period. Declare your parent’s full medical history honestly, because hidden conditions are a common reason claims get rejected.
If Your Parents Can’t Get Insured
Sometimes a policy isn’t possible because of age or health. The law still gives you some relief.
If your parent is a senior citizen that has no health insurance, you can claim up to ₹50,000 a year for their medical bills.
This covers costs like consultations, tests and medicines. Pay these bills digitally and keep every invoice. This option applies only if no health insurance premium has been paid for that parent.
Quick Checklist Before You File
A few minutes of paperwork makes sure you claim everything you’re entitled to.
● Check whether your company policy covers your parents and until when.
● Buy a separate cover for them if it doesn’t, ideally before they turn 60.
● Pay premiums from your own account, digitally.
● Claim your parents under the separate parents’ limit, not your family limit.
● Use Section 126 from FY 2026-27 (AY 2027-28) onwards and 80D for earlier years.
Final Thoughts
Leaving parents out of your company cover puts them at risk, and you pay more tax than you need to.
A separate policy for them resolves both problems. They get cover that stays with them, and you get a second deduction every year.