Difference Between Life Insurance & Health Insurance

What is Life Insurance?

Life insurance helps you secure the future of your loved ones in your absence. It is a contract between the insurer and the policyholder where the beneficiary gets a predefined sum insured after the death of the insured. It provides coverage to your family in your absence to pay any unpaid loan amount, daily expenses, or some educational fees.

Life insurance mainly offers security to your dependents to live a normal life financially, even in your absence. With the add-on rider benefit, you can avail yourself of extra financial assistance in case of major disability or critical illness, too.

Types of Life Insurance Plans

Different types of life insurance plans can give you financial help on different bases. Some of them are:

• Term Life Insurance: Term insurance is an affordable plan that provides financial protection for your family if something happens to you. The coverage is based on the amount you pay as the premium during the policy term.
• Endowment Insurance: These plans give you money in two cases: if you live through the policy term or if something happens to you during that time. In both cases, either you or your family will receive a lump sum amount.
• ULIP (Unit Linked Insurance Plan): An investment plan is a type of life insurance where you pay money regularly, and in return, you get guaranteed returns over time. It helps you grow your money while also giving some insurance protection.

Benefits of Life Insurance

Some of the major benefits of purchasing a life insurance plan are as follows:

1. Financial Protection for Beloved Ones

Life Insurance offers financial security to your loved ones in your absence. It covers your financial commitment and helps your family to live a normal life afterwards. A lump sum amount is given to the beneficiary to tackle all the daily expenses, educational fees, or other financial needs.

2. Tax-free Return

The return that the beneficiary gets from the insurer is usually tax-free. It ensures maximum financial protection to the family of the insured without any deductions based on some terms and conditions.

3. Saving Benefit

Some insurance plans not only provide financial protection but also help to save money for the insured, depending on the features of the plan. Along with the basic coverage, you can also go for maturity benefits, investment returns, or bonuses.

What is Health Insurance?

Health Insurance helps you to deal with uncertain medical expenses and hospitalisation charges. Your medical expenses get compensated either directly or the insurer reimburses them to you later.

Health Insurance covers critical diseases, surgeries, and long-term treatment costs for the insured. In case of additional coverage, you can opt for add-on riders with your standard plan to make your hospitalization experience peaceful.

Types of Health Insurance Plans

The types of health insurance plans are as follows:

• Individual Health Insurance: It offers medical coverage to a single person only. All the hospitalization expenses are covered relating to the individual.
• Family Floater Health Insurance: This insurance plan covers the medical expenses of a whole family, including senior citizens, children, and partners.
• Senior Citizen: As defined by the name, this health insurance plan covers the medical expenses of people above 60 years.
• Maternity Benefit: These health insurance plans usually provide a maternity benefit with some beneficial add-ons.
• Critical Illness: This health insurance policy is designed to cover different critical diseases like cancer, heart disease, HIV, etc.

Benefits of Health Insurance

Some of the major benefits of health insurance are:

1. Covers Medical Expenses

Health Insurance covers the medical expenses of the insured. With a family floater plan, you can get health expenses coverage for your family as well, including your spouse, children, and parents.

2. Secures Future

In case of any uncertain disease, health insurance provides coverage for most of the expenses, including daily visits, inpatient expenses, and medical costs. You can still maintain your savings and deal with the illness in the best possible way.

3. Customised Plans

For people who have a critical disease, health insurance is a boon. It covers specific diseases by providing the best coverage. You can customize your health insurance policy based on your needs and requirements.

4. Cashless Hospitalisation

If you face sudden medical emergencies and are unable to arrange cash, you can go with the cashless hospitalization provided by health insurance. It means that the insurer can directly pay off the medical expenses if you get treatment in their network hospital.

5. Tax Benefit

You also get the tax benefit under Section 80D of the Income Tax Act.

Life Insurance vs Health Insurance

Life insurance and health insurance are different in many ways. Some of the key differences between them are as follows:

Which Is Better: Life or Health Insurance?

If you want financial support for yourself in case of any health emergencies relating to your family or yourself, you should go with health insurance plans. But if you want to secure the future of your family after your death or any severe disability, then you should choose life insurance plans. This plan helps to deal with your financial commitments to your family.

Conclusion

Life and health insurance are important for anyone who cares about their future and their family. Health insurance helps you pay for medical expenses, while life insurance takes care of your family if something happens to you.

Life is full of uncertainty, so it is better to be ready for it! Both plans help to ensure financial protection and peace of mind. In case you need some assistance relating to these plans, feel free to contact Square Insurance anytime. We would love to guide you well.