5 Major Differences Between Life Insurance And Health Insurance
Do you think it’s important to make future plans? If so, your next step should be to buy life and health insurance coverage. Let’s fully comprehend these regulations. Life insurance and health insurance have significant distinctions from one another.
Life insurance and health insurance in India have different benefits
It is best to compare life insurance and health insurance on a table as shown below:
|Life insurance||Health insurance|
|Life time comprehensive coverage that offers complete insurance. It pays out to your beneficiary at the time of the policy holder’s passing away.||These offer medical coverage and covers health needs. There is no additional coverage beyond anything other than medical expenses.|
|Fixed and flexible premiums available all based on the choice of policy. Investment plans are also made available.||Only fixed premium is available. Investment is not the primary concern here. Medical & Health protection is the main motive of this plan. Cumulative bonus is permitted to be claimed here.|
|These are long-term plans.||It is a short term plan|
|Life insurance is usually for a fixed tenure. It generally is terminated once the tenure of the Insurance is over.||The tenure of this kind of insurance is never fixed. Under usual circumstances, the insured renews the policy annually so that he/she continues to have the protection coverage it offers.|
|It is for a fixed tenure and it generally gets over with the expiry of the policy.||The policy holder generally renews the policy annually and thus enjoys the health protection continuously.|
What is Life Insurance?
The contractual agreement between a policy holder and the insurance company that promises to give the amount insured to the bereaved family after the demise of the policy holder. There are several different types of life insurance.
- Type 1: Whole life insurance provides fixed premium payouts and a generally tax-free and fixed sum assured to the beneficiary.
- Type 2: Universal life insurance is a type of investment policy that also offers a passing away benefit to the investor.
What is Health Insurance?
Health insurance comes to your rescue only when you have health issues, need of medical assistance and hospitalization. The policy holder pays a fixed premium for their health protection.
Here you get your medical expenses reimbursed by your insurance company after paying for the same yourself or the company takes care of the sum insured directly with the hospital or facility that has treated you.
Types of Health Insurance:
- Type 1: Individual health insurance
- Type 2: Family Floater Health Insurance
- Type 3: Health insurance for senior citizens
Life insurance vs. health insurance
The following highlights the differences between the types of insurance in India:
|Feature||Life insurance||Health insurance|
|Why should you invest?||Offers your family financial security in case of your sudden passing away.||Medical expenses are costly and with a health cover you need not dig deep into your pocket for medical emergencies.|
|Core benefit||The sum promised is paid to the beneficiary of the demised person.||Treatment expenses are covered subject to maximum coverage amount and other conditions specified.|
|Additional Benefits||Many benefits can be added on top of the existing cover policy such as, maturity benefits, surrender benefits, loyalty additions etc. *||A few policies offer free health check-ups. Cumulative bonus can be added in terms of some policies. *|
|Types of covers||1. Individual Cover
2. Group Cover
3. Group coverage
|Tax Benefits**||Benefits under Section 80C, Section 10(10D) of the Income Tax Act||Benefits under Section 80D of the Income Tax Act|
You can maximise their unique potential by making a selection that is well-informed and takes your needs into account so that you get maximum benefits of health insurance.
* Standard T&C Apply
** Currently, there are 2 tax regimes in India – new and old. To get the tax benefit you desire, choose the correct one after consulting an expert. You can opt for a regime change during the next financial year.
# Visit the official website of IRDAI for further details.
## All savings are provided by the insurer as per the IRDAI-approved insurance plan. Standard T&C apply
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