Difference Between Term Insurance, Life Insurance And Health Insurance
Updated On Nov 04, 2020
Insurance has become the general household term in today’s world. The entire world is slowly realising the importance of insurance, and its importance in India is growing as well. Indian society is getting accustomed to the concept of insurance. There are still very common terms in Insurance which confuse people to a great deal. This confusion can be removed by educating the masses, which would eventually help them to make educated decisions when they are opting for a policy.
The most basic confusion that any person could have is the difference between term insurance, life insurance and health insurance. Each of them has their own specifications and unique use.
What is Life Insurance?
Life insurance policy is a life cover, it insures the policyholder’s life against any unforeseen death. It is a policy where mostly tenure of the policy can be decided by the policyholder. The policy returns huge benefits on maturity, and it is not necessary for the policyholder to die in order to get the money. It is life cover as well as a mode of money accumulation and growth.
What is Term Insurance?
Term Insurance is a type of life insurance and also provides life cover. As the name suggests, this is a policy that is given by companies for a definite term. The term for this policy is 20 or 40 years. The term insurance policy is considered to be a true protection plan because if during the term that has been insured, if the policyholder dies, then the family or the nominee of the policy would receive financial assistance. There is no money back or financial assistance if the policyholder lives after the maturity of the insured term. Few term insurance policies provide survival benefit but not all.
What is Health Insurance?
This policy is dedicated to health. Health insurance comes in handy in case of a medical scenario. The policyholder is protected against the risk of heavy medical charges. In most cases, if it is a floater plan, not only the policyholder but also his family members are protected against several diseases such as cancer, covid-19, paralysis, etc.
You may also like to read: Importance of Health Insurance Plans
Differences Between Term Insurance, Life Insurance, and Health Insurance
The following table lists out the differences between the term, life, and health insurance according to various factors.
|
Factors/Benefits |
Term Insurance |
Life Insurance |
Health Insurance |
|
Coverage |
The coverage of the term insurance is limited to the life of the insured within the term of the policy. |
Life insurance provided coverage on life on maturity of the policy. |
Health insurance provides coverage against certain diseases and the medical costs incurred in treatment of those diseases. |
|
Policy Duration |
The usual range is 10 to 35 or 45 years. |
The policy duration is 5 to 30 years. |
The tenure is 5 to 10 years. |
|
Policy Premium |
This is the cheapest and most affordable insurance available in the market. |
The premium is more than the premium in term life insurance |
The premium depends upon age, diseases insured and medical history. |
|
Death Benefits/ Benefits |
The death benefits are applicable if the policyholder dies during the term of the policy. |
The policy provides benefits even on death during the policy tenure and even after maturity of the policy. |
The policy needs the policyholder to be hospitalised, or some medical charges to be incurred to provide any benefits. |
Conclusion
The three policies have their own importance and benefits. They cater to specific insurance seekers with defined needs. The most important policy to have in today’s time is, without any doubt, a health insurance policy followed by a good life cover. Life cover may vary between term life cover or traditional life cover depending upon your affordability and needs.
Also read: Benefits of Health Insurance Policy in India
Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.
