Term Insurance Plans VS Health Insurance Plans
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Insurance might be a wise investment when it comes to protecting the financial interests of your loved ones. Whole life insurance, health insurance and term insurance, and other types of insurance are all available on the market, with a wide range of features and specialities. Most people, however, have a common misunderstanding about the distinction between term and health insurance. And knowing the distinction between a term plan and health insurance can assist you in selecting the appropriate product at the appropriate moment in your life. So, continue reading to see which one is most suited to your needs and to have a better understanding of each distinct feature.
What is a Term Insurance Plan?
A term insurance policy provides a death payout in the sad case of the insured person's death. Therefore, a term plan allows your family to continue living their lives while also covering basic needs like food, education, and debt repayments. If the life assured dies, such plans pay you the money insured. However, there are no maturity benefits if the life assured survives the policy term.
What is a Health Insurance Plan?
A health insurance policy's main aim is to pay the policyholder's medical expenses. As a result, health insurance coverage can cover the costs of hospitalisation, doctor's fees, medications, and regular checks, among other things. However, these plans do not provide a death or maturity benefit and are solely intended to pay medical bills.
Must read: Term Insurance and How It Works in India
Term Insurance Plans VS Health Insurance Plans
While both provide financial security, some fundamental distinctions exist between health insurance plans and term insurance plans.
- Purpose - Health insurance is intended to give financial assistance if the policyholder requires medical treatment, either for a pre-existing ailment or in the event of an emergency. Term insurance is designed to offer a safety net for family members if the policyholder passes away during the policy's term, providing them with a death benefit that may allow them to continue living comfortably.
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Payment - Health insurance pays out a lump payment based on the treatment that an individual requires while being treated for a sickness or injury. On the other hand, if the life assured dies during the term of the policy, the nominee will receive a guaranteed sum as a death benefit in a term insurance plan.
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Premiums - Health insurance premiums are often greater than term insurance premiums, which can be low for equivalent coverage quantities.
- Maturity Benefits - If a person does not use the services provided by health insurance within a year, the money can be carried over to the next year, resulting in benefits such as lower premium payments and increases to the sum assured. In contrast, term insurance plans have no maturity benefits after the term ends.
- Investment Plan - Term insurance is not designed to act as a traditional investment plan; nevertheless, if the policyholder outlives the term insurance plan, they may be eligible for a refund of their premium payments if the plan includes a premium return provision. On the other hand, some insurance companies may offer market-linked health insurance policies that can be used as an investment as well as a means of financial protection.
Conclusion
It's a good idea to have both term and health insurance because they have so many advantages. If you can't afford both plans' premiums, the best thing you can do is figure out how much coverage you need and buy only that. According to experts, you should have ten times your current annual salary in life insurance. As a result, you won't have to purchase a larger cover, and you can enjoy maximum benefits.
Also read: Benefit Of Purchasing Term Insurance Plans With High Sum Assured
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.