Medical insurance premium paid for family, including parents, is deductible

When you pay an Insurance premium of up to ` 40,000 (must be paid by cheque) during a financial year for the health of self, spouse, dependant parents or children, it is allowed as a deduction from income. Hence taxable salary reduces up to maximum of ` 15,000 (up to ` 20,000 for senior citizen). Therefore, you get “health bhi aur wealth bhi”. Even if your parents are not dependant, you can pay for medical insurance and claim deduction. You must compare premium from different insurance companies, medical conditions and treatments covered and list of hospitals on the panel of the insurance company. We’d recommend that you go for cashless medical insurance. In cashless insurance, all hospital bills will be paid by the insurance company. If you incur hospital expenses on your own and your claim is later reimbursed by the insurance company, then that reimbursement is not taxable. There is zero maturity value of a medical insurance policy - just like car insurance. It only helps to mitigate the medical expenses in case of a sudden health problem. The premium paid by an employer for employee’s accidental cover is not taxable to the employee or the employer.

Source- tax planner