Comparison Between Health Insurance and Term Insurance

Even though health insurance plans cover medical costs, have you thought about what will happen to your family when you die? That is when a term insurance plan comes into the picture.  It's just as important to make sure that your loved ones' financial needs are met as it is to make sure that their medical needs are fulfilled too. A health insurance plan takes care of medical and hospital costs for you and your family, while a term insurance plan protects the family's financial future.

What is Health Insurance?

A health insurance policy is a contract between the insured and the insurance company. If the insured gets a certain disease, the insurance company will pay for the hospitalisation expenses. Your health insurance policy's terms and coverage will tell you how much coverage you or your family members will get. The point of health insurance is to protect your finances against large, unexpected medical bills. Most of the time, the amount of compensation is limited to either the actual costs or the amount insured, whichever is less.

What is Term Insurance?

Insurance is a contract between the insured and the insurance company that says that if the insured dies, the insurance company will pay money to the nominee of the insured. The goal of term insurance is to help the insured person's family out financially if the insured person dies unexpectedly. The amount of compensation has nothing to do with costs; it is set when the policy is taken out.

Difference Between Health Insurance and Term Insurance

Below we have discussed the differences between health insurance and term insurance in detail - 

Health Insurance Coverage

Understanding health insurance coverage :

• It protects you and your family from unexpected medical costs if you add them to your health insurance plan.

• It's like an invisible hand that helps you with money when you need it. You can use it whenever you need to; there's no set time frame.

• The cost of the premium is a bit expensive.

• Most insurance companies pay out premiums once a month, but some also pay out premiums every three months, every six months, or once a year.

• It does come with a no-claim maturity bonus or a rollover of the unused amount, which can lead to lower premium payouts the next year.

• This is an investment policy that gives you money when you need it most. Some health insurance plans also come with a plan for investing in the stock market.

Term Insurance Coverage

Understanding term insurance coverage :

• Ist is a way for an insured person to protect his or her family financially in case the insured person dies.

• Gives the named beneficiary a one-time fixed amount if the insured person dies.

• Most of the time, the premium is not very high.

• Most premiums are paid once a year, and the monthly cost is usually less than 500 INR for about 1 crore of coverage. Most people pay once a year because the total amount doesn't hurt their pockets too much.

• It doesn't have any policy maturity benefits. Instead, it gives the insured's family a financial cushion after the insured's death. If the insured person is still alive at the end of the policy's term, the policy is no longer valid.

• This isn't your typical investment policy, but if the insured person is still alive and the Premium Return plan was part of the term insurance plan, he or she can get back the premiums paid over the term. This premium refund is not taxed, and in a way, it can be thought of as a safe for your piggy bank.

Different Kinds of Term Insurance

Here are some types of term plans you might want to think about:

• Plan for Level-Term Insurance
• Return of Premium Term Insurance (TROP)
• Premium Refund Plan
• Plans with Add-Ons
• Plans that can be changed
• Plan for Less Time

Different Kinds of Health Insurance

There's a health insurance plan for everyone. Here are some of the different kinds of health insurance you can think about:

• Health insurance for a single person-
• Health insurance for the whole family
• Health insurance for senior citizens 
• Group health insurance
• Critical Illness Insurance
• Health insurance add ons

Conclusion

Investing in health insurance and term insurance plans is a good idea. Yet neither of them can replace the role of the other. Each policy is made to cover a different part of your life so that you and your family are financially safe. So, you will be able to choose the right health and term policy if you think about your future financial goals and health.

Also Read: Why Should You Not Rely On Employee Sponsored Health Plans?