In present times, where unpredictable and unforeseen events have become normal, safeguarding your medical and financial future is crucial. Imagine, there’s a person full of youth named Mary, navigating through her career or even starting one from scratch. She’s lively, energetic, and ambitious about succeeding in her field. Let’s suppose her parents are getting older and are closer to their retirement Due to this, she has become uncertain about the future and more worried about her parent’s health. Should she invest in health insurance that will take care of medical expenses or should she consider a life insurance that will make sure her family is taken care of if something is to happen to her?
If Mary were to read this blog, she would become familiar with both options and have a better understanding of both, and so would you. Stay tuned as we explore health and life insurance in depth and help you make a well-informed decision!
Any type of insurance serves a specific purpose, and so is the case with both health and life insurance. Let’s take a look at what kind you need to buy and at what stage of life you need to buy it.
MAJOR DIFFERENCES BETWEEN LIFE AND HEALTH INSURANCE?
Life insurance pays a lump sum to your family members or beneficiaries in case of your death. Meanwhile, health insurance, on the other hand, helps safeguard your medical future by paying for your medical expenses such as doctor visits, tests, medications, and hospital stays.
This was only a short overview of the two terms. Let’s explore their nuances to better understand them!
WHAT IS HEALTH INSURANCE?
Health insurance comes to your aid in case of a medical requirement and safeguards your family in case of medical and health expenses. If you need hospitalisation or medical assistance, health insurance covers those expenses for you to focus on your recovery and loved ones instead of worrying about your financial situation. The policyholder is granted medical coverage and gets their medical bills reimbursed after paying them, or the company might take care of the expenses directly with the medical facility that has treated you. Infact, some policy covers offer Cashless payment at network hospitals as well and companies might take care of the expenses directly.
Various types of health insurance policies available in the market come with which you can avail yourself. Some of them are mentioned below for better understanding-
- Individual health insurance: the name gives it all away. Hence, individual health insurance is for an individual and is used to get financial coverage for medical expenses like accidents, illnesses, emergencies, and hospitalisation – maternity benefits, OPD expenses, and critical illness cover.
- Family floater health insurance: As the name suggests, family floater health insurance covers all family members against one single premium. It covers illnesses, hospitalisations, medical emergencies, and accidents that might occur in the future for every family member.
- Senior citizens’ health insurance: This insurance is specifically for those who have crossed the 60-year mark! The name gives it all away, and the rest we will tell you—this insurance is specifically made while keeping in mind the physical needs of a citizen who has crossed 60. ItW involves domiciliary care, organ donation expenses, and critical illnesses.
WHAT IS LIFE INSURANCE?
Life insurance is a written contract that states that in the tragic event of the policyholder’s death, the insurance company will pay a pre-decided amount to the policyholder’s grieving family. The money received during the beneficiary’s compensation is not subject to any taxation, so the entire sum is given to the grieving family without any deductions.
This insured sum provides financial safety to the policyholder’s family and proper coverage for future goals and financial needs!
There are various types of life insurance available and we will discuss them to develop a deeper understanding of life insurance and its benefits for your family!
- Term insurance plans: A term insurance plan provides a financial safety net for your family if something happens to you. Term insurance is a plan made purely for protection purposes and is not market-linked. The premium for a term insurance plan is generally lower than any other life insurance product. It is even more affordable if you buy it in the earlier stages of your life. A term plan can be used in many ways; for example, if your family has any outstanding expenses, they can be paid through this cover, and your family can also use the cover in the absence of an income. for expenses such as educational costs and day to day expenditures as well.
- Endowment insurance plans: these plans are ideal for people who may want guaranteed returns along with life insurance, these plans allow you to save regularly along with the benefits of life insurance protection. This insurance plan gives you a lump sum amount when the policy matures, and in the tragic event of your death, your nominees also receive a death benefit. These flexible plans allow you to choose a suitable time frame and method to pay the premium.
- Money-back insurance plans: the insured gets a percentage of the sum assured at regular intervals, and the money-back plan rewards you regularly for saving money. A money-back plan is an endowment plan with systematic payouts and increased liquidity. These plans are designed to support and help you achieve your short-term financial goals and may add to your monthly or yearly income.
- Whole Life insurance: This policy gives you coverage for 99 years, which is unlike other plans that give you an average coverage of 10-30 years. This plan gives you and your family life cover for extended periods and is ideal for people who have financial dependents even in their old age.
- Child insurance policy: your child deserves the best, and a child Insurance plan is the best way to safeguard your child’s financial future and leave a corpus for it. This plan can help you build a significant corpus for your child’s educational and marital expenses and relieve stress if something happens to you and your family. Child insurance either gives you maturity benefits as yearly payouts or once your child turns 18; financial protection is an essential factor.
LIFE INSURANCE VS HEALTH INSURANCE?
We hope you will have a clear picture of life and health insurance plans and which one you should choose! In Mary’s case, had she gone through this article, she would’ve easily reached a consensus and invested in the perfect insurance plan catered to her requirements! Health and life insurance play different roles in your financial portfolio, and making an informed decision will always take you ahead in the long run!
On a parting note!…
Life and health insurance are for everyone, and safeguarding your and your family’s future is something you will never regret later on. Anyone worried about the future should consider purchasing one of these plans after noting your requirements. Every investment decision should be made with the utmost consideration of your needs and financial goals, and we are always behind your back to guide you toward a booming financial future no matter what!
Life is uncertain, and preparing for the worst is better! Protect yourself and your loved ones before it’s too late!
Get insured and be assured!
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Disclaimer – This article is for educational purposes only and does not intend to substitute expert guidance. Mutual fund investments are subject to market risks. Please read all the scheme-related documents carefully before investing!
