Most of us heard about Life insurance and health Insurance quite often. people discuss when they want to buy a plan but due to not knowing the exact difference between Life Insurance and health insurance, they feel it’s a very hectic task to decide which one is perfect.
In today’s times, having insurance cover is uppermost priority to protect your finances from various unforeseen risks. An insurance cover not only helps you protect your property but also helps to protect your health and life. In India, most people still consider insurance a burden and try to postpone buying insurance until they are 40 or older.
In this article, we will cover the difference in depth. The following are the differences between life and health insurance.
| Life Insurance | Health Insurance |
|---|---|
| Life Insurance is a contract in which the insurance companies agree to pay Insured Nominee a certain amount if the insured person dies. | Health insurance is a contract in which the insurance companies pay the expense of medical and hospitalization to the insured. therefore there is no payout on death. |
| Here your nominee receives the payment as the coverage is against your death. | The coverage is against the chance of hospitalization and medical expenses. |
| Once the Policy is matured, invested money can be recovered. | The money can be recovered in the form of reimbursement for your medical expenses, if you do not claim it you may get a reward in your next premiums. |
| It has the cover for the Individual as well as for the group. | It also covers individuals, families, and groups. |
| It has a Term Insurance Plan, Child Insurance plan(building corpus), retirement, etc. | It has comprehensive health plans, critical insurance plans, etc. |
| It comes under Section 80 C, Section 10(10D) of the Income-tax Act | It comes under Section 80 D of the Income Tax Act. |
| It is for the longer term | It is for the shorter term |
| If you are looking for a long term then it can be a valuable investment for better cash. | Investment is not the priority of this plan but protection is. |
| It is generally for a fixed tenure. It is mostly terminated once the policy is over. | tenure of this policy is not fixed. under normal circumstances, the insured person has to renew the policy annually in order to avail of the coverage benefits. |
| Depending upon the life insurance policy you can choose both survival and death benefits at the end of the term. | It does not come with survival or health benefit, it only covers your current medical and treatment needs. |
Many insurance companies offer competitive rates for both with great benefits. Therefore, before you do the final selection about insurance, make sure you do your research on the difference between life insurance and health insurance.
Which is Better: Life Insurance or Health Insurance?
Experts recommend that everyone should have both health insurance and life insurance in their portfolio. Both serve different purposes. While health insurance covers the cost of treating various diseases, life insurance helps your family reduce the financial burden in the event of your untimely death.
If you are looking to buy insurance, knowing their difference will help you make an informed decision.
Conclusion
The above explanation about life insurance versus health insurance would be enough to decide which insurance to buy. The health insurance will cover your short term medical expenses and Life insurance will cover you for the long term along with maturity benefit.
When you’re just starting out, life insurance may not be your first priority. Putting it off may cost you. So it would be a great idea if you can start having life insurance at an early stage of your career. Later you can go for health insurance as well as you start growing in your career Or you can buy both together depending on your budget and the plan that suits you.
A good thumb rule is to aim for a death benefit that is equal to 5 to 10 times your income. A financial planner can help you get a more accurate picture of the amount of security you need.
