Tax benefit on health insurance policy varies based on family size

Amount of insurance purchased should, however, depend on your requirement, and not just the tax benefit

The pandemic has raised awareness about the need to have adequate health insurance. If you are under-insured, buy it now so that you can avail of tax deduction for 2020-21 under Section 80D of the Income Tax Act. The amount of deduction you can avail can vary widely, depending on your family size and structure. 

Wide variation

Suppose that the buyer is a single, unmarried individual. He can avail a maximum deduction of Rs 25,000. 

Next, consider an individual who pays the premium for himself and his nuclear family (wife and children). For him, too, the limit is Rs 25,000,