In fact, the premium paid for not only you and your family but also your parents make you eligible for income tax exemption under section 80D of Income Tax Act, 1961. As per section 80D the premium paid towards health insurance plan is deductible from the taxable income. The upper limit for this deductible amount is Rs 25,000 and is extendable to Rs 50,000 for senior citizens. There is an additional benefit of up to Rs 25,000 for cover extended to parents and that is extended to Rs 50,000 if they are senior citizens. In cases the ages of both the proposer and their parents are over 60 years the deductible amount in such cases will extend to Rs 1 lakh.