Difference between Life Insurance & Health Insurance
Updated On Apr 26, 2021
Table of Contents
The life insurance and health insurance policies are distinct elements of one’s financial portfolio and are designed to cover the insured at times of need. With a comprehensive health insurance plan, the insured can cover the expenses that are incurred towards any medical or surgical treatment. With a life insurance plan, the insured can help reduce the financial burden of the family member upon their unexpected demise.
Differences Between the Two Types of Insurance:
There are many types of insurance policies for people of all ages in India. The two most important insurance schemes are life insurance and health insurance policies. The major differences between life insurance and health insurance policies are as follows:
|
Attributes |
Life Insurance |
Health Insurance |
|
Nature of the Policy |
Offers financial cover for the family members upon the death of the insured. The death benefit can be used for education, to fund marriages of children, and to repay debts. |
The insurance covers the cost of hospitalization and relevant medical and/or surgical treatment. The insured can avail cashless treatment facilities at network hospitals. |
|
Core Benefits of the Policy |
The sum assured at the time of obtaining the insurance will be paid to the nominee of the life insured. Along with the sum assured, the maturity benefit, surrender benefit, and other loyalty additions will be added. |
The policy will cover the treatment cost of illnesses, as per the maximum amount covered in the base plan. In some policies, no claim bonuses can be added to maximize its benefits. |
|
Health Check-ups |
Health checkups are not generally required for life insurance. However, some companies can require one, based on the age of the insured at the time of opening the policy. |
Health checkups are mandatory for availing of health insurance. Some companies will offer free health checks for the insured. |
|
Extent of Coverage |
The coverage of the insurance will be offered only to the individual. On the death of the insured, the settlement amount will be paid to the nominee. |
In family floater plans, the health insurance coverage will be offered for self, spouse, children, parents, and even siblings and in-laws. And accordingly the premium amount will increase. |
|
Types of Plans |
There are many different types of life insurance plans such as,
|
There are three types of health insurance plans,
|
|
Tax Benefits |
The premium that is paid against the life insurance plan is liable for tax deductions against section 80C and section 10 D of the Income Tax Act. |
The premium that is paid against the health insurance plan is liable for tax deductions against section 80D of the Income Tax Act. |
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Life Insurance Versus Health Insurance
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Bottom Line
It is a common belief that insurance policies are for young people. But it is not true and these policies can be bought at any age and are a must to repel from debts. When it comes to purchasing insurance, most people split between health and life insurance. Both of them have their benefits and it is thus better to opt for both. For those who find it difficult to bear the premium of both policies, it is better to opt for a policy that offers a suitable cover amount to secure self and family members.
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.
