5 MAJOR DIFFERENCES BETWEEN LIFE INSURANCE AND HEALTH INSURANCE

By on April 30, 2019
LIFE INSURANCE AND HEALTH INSURANCE

An insurance can be termed as a contractual arrangement between the insurer and the insured in return for a fixed sum (premium) that commits to compensate the insured for the loss or damage caused by a certain event.

While health insurance covers the costs incurred towards medical treatments, life insurance can support your family by reducing their financial burden, in case of your untimely demise.

Benefits of Life Insurance

  • Risk coverage is provided to the insured family in the form of monetary compensation in lieu of premium paid.
  • Provides cover for health expenses that include hospitalization expenses and critical illness treatment.
  • Loan facility is available on selected policies. A loan amount can be taken in percentage of the cash value under the policy, depending on the policy provisions.
  • Insurance policies promotes savings by coming up with unique saving plans that allows you to earn high ROI.
  • It offers different plans for different uses,depending on your need for insurance.
  • The return on investment is safely paid back.
  • Insurance policies assure income benefits that pays for all rents, loans and other expenses like house rent, electricity bills, child education, etc. Your family stays secured with income provided at regular intervals as it compensates for the income that is discontinued after the loss of an earning member.

Benefits of Health insurance

  • Health insuranceplans cover medical expenses like hospitalization, day care procedures, ambulatory patient services, emergency services, prescription drugs, pregnancy, maternity, paediatric services, mental health,  substance use disorder services and more.
  • They cover critical illnesses and life threatening diseases. The amount provided can be used to meet treatment costs, financial obligations or daily expenses.
  • Such plans offercashless health insurance claim benefits, wherein the hospitalization expenses are settled between the insurer and the hospital itself. To avail this benefit, you must get admitted at any of the insurer’s network hospitals.
  • Convalescence benefit, also known as recuperating or recovery benefit, takes care of the policyholder’s expenses for supplementary costs that arise due to hospitalization. A lump sum amount is paid for the hospitalization ranging from 7 to 20 days.
  • Insurers have expanded their health insurance cover to include domiciliary treatment, i.e. treatment taken at home under medical supervision, with varying specifications.
  • Insurance policies also offer free periodic health check-ups to their policyholders after every 4 or 5 claim-free years.

Bajaj Allianz General Insurance offers a wide range of policies with cashless treatment across a huge network of hospitals and hassle-free claims settlement. The Extra Care Plus Policy offers an additional cover to your existing health cover and provides more health protection to you and your family. Family health insurance benefits include a suitable coverage for the insured. Some of the others benefits might include:

  • In-patient hospitalization cover
  • Organ donor expenses
  • Expenses for all day care treatments
  • Pre and post-hospitalization expenses that happen 60 days prior to hospitalization or 90 days after hospitalization
  • Emergency road ambulance cover
  • Free health check-up and lifetime renewal option

Some major differences include:

Criteria Life Insurance Health Insurance
Meaning Insurance that covers the risk of your life and pays an assured sum in case of an unfortunate incident. A general insurance, which covers the medical expenses of the insured up to a specified amount.
Term and Affordability Less expensive and can be taken for a long term of up to 10 or 20 years Comparatively more expensive and is taken for a short term of 1 or 3 years
Recovery of Money Money invested is recovered on the maturity of the policy No money is recovered at the end of the term except the amount paid for medical treatment
Type of plans Term plans, savings, child-related, retirement Comprehensive health insurance plans, critical illnesses
Tax Benefits Under section 80c, Selection 10 (10D) of the Income Tax ACT Under section 80D of the Income Tax Act

As much as we love to experiment with new things in life and be adventurous, it is important not to risk our lives at any cost. In order to live life freely, it is necessary to secure ourselves with a good life insurance policy.

Plus, with changing lifestyle habits and increasing climatic changes, there can be a severe impact on an individual’s health. Medical costs associated with the treatment of any health conditions has increased rapidly and to safeguard your finances against this, health insurance plans are a necessity.

So, if you intend to live a carefree life, make an informed decision and protect yourself and your loved ones from the severe impact that can arise at any given time.

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