There is definitive tax benefits associated with the critical illness insurance policy. The benefits assured to the policyholder for such a policy are based on the Income Tax Act of 1961. As per this act, the tax benefit that the policyholder is liable for is approximately INR 15,000. At the same time, owing to the comprehensive nature of coverage offered by such policies in the case of senior citizens, tax benefits of up to INR 20,000 can also be availed.