Health Insurance Vs Term Insurance
Updated On Dec 02, 2021
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An insurance is a must if you want yourself and your loved ones to remain stress-free in all situations. There are different kinds of insurance policies that are available and can be purchased according to what one is looking for from their policy. Two of the most common types of insurance policies are health insurance policies and term insurance policies. This article will show a comparison among them.
What is Health Insurance?
Under health insurance, the policyholder and anybody who is insured receives financial support if they have to avail of any medical service. The cover extends to a certain number of procedures, benefits and diseases. The maximum limit of the compensation depends on the scope of the insurance policy, which is defined by its sum assured. Health insurance safe keeps your financial interests even in the face of any medical procedure or treatment that might incur hefty expenses. It has a number of benefits that help the insured receive adequate medical attention.
Must Read: 10 Benefits of Health Insurance Riders
What is Term Insurance?
A term insurance policy is a kind of life insurance that extends its cover over a certain time period, known as the term of the insurance policy. It pays out a certain sum of money, depending on the money invested, at the time of the policyholder's death. The amount that is given out is a predetermined amount, regulated at the time of the purchase of the policy. It is a great insurance option that ensures that the beneficiaries of the policyholder are financially supported even after their death, especially if it is sudden and unexpected.
Health Insurance Vs Term Insurance: Key Differences
The following are some of the primary differences between health insurance and term insurance.
| Criteria | Term Insurance | Health Insurance |
| Maturity Benefit | There is no maturity benefit that is paid out in this case. However, the amount of premium is returned if it has a return of premium benefit, given that all premiums till the date of maturity have been paid. | A health insurance plan does not have any life cover. Therefore, there is no way to get any amount back, even the premiums. There is no pay-out except when claims are made for availing of medical facilities. |
| Premium Rates | Term insurance premiums are mostly very low and affordable, making them an affordable option. | Health insurance plans can be costlier, especially if it has multiple types of covers. Moreover, it gets costlier if the policyholder is older. |
| Policy Renewal | Term insurance plans do not have renewal options. They cover the policyholders only for a certain amount of time and the premium amount is the same throughout. | Health insurance plans can be renewed after their policy period is over. At the time of renewal, discounts and bonuses can be availed on the premium amount. |
| Tax Benefit | Available under Section 80C of the Income Tax Act of India | Available under Section 80D of the Income Tax Act of India |
Take Away
The ultimate decision of which insurance to buy depends on individual choice and circumstance. While a term insurance policy might be bought late in life, a health insurance policy can become considerably expensive at that time. There are various types of health as well as term insurance plans, depending on the ambit of coverage they provide. Moreover, both types of plans can be enhanced with the help of add-on covers with specific areas of cover.
Also Read: Health Insurance Plans Offering Free Health Check-Up Benefit
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.
