Here is a question for you. Milk and dairy products are a good source of nutrition. So, do you stop consuming fruits if you consume enough dairy? No, you do not. Both dairy products and fruits are health foods. Each offers different benefits. Milk is a good source of minerals, while fruits are rich in vitamin.
You can extend the same logic to the arena of insurance.
At first glance, health insurance and life insurance seem like they serve the same purpose. They cover an individual against an unforeseen event in the future. But that’s where the similarity ends. They cover completely different risks. The benefits each offer are very different. Let’s have a look:
Life insurance in simple terms
A life insurance policy is a contract that you enter along with an insurance company. The insurance company pays a sum of money at the death of the insured person. Or, they may pay a sum to the insured person after a specified period. Life insurance gives financial security to the insured person or their family. The family can afford to maintain its lifestyle even in the absence of the breadwinner. Very few policies cover any medical conditions or treatments.
What health insurance means
Health insurance, on the other hand, covers medical costs. It can include regular health check-ups; treatment costs, and even reimburse hospital bills. But health insurance policies do not offer life covers. So, there is no payout to the family in case of death.
Let’s understand with a small story. Suppose a 45-year-old had a heart attack. He gets admitted in the hospital. The doctors conduct angiography and angioplasty to treat his ailment. This costs lakhs of rupees. This money could be paid by the health insurer. A few days later, though, he passes away. The life insurer now comes in the picture. The life insurer pays the man’s widow the ‘Death benefit’.
Can one substitute the other?
Take a close look at both kinds of policies. You will realize that they are quite different. They offer different services to the customer. Having both life and health insurance policies is necessary. People tend to ignore health insurance when they already have life insurance. But you need health insurance at all times.
You need health insurance to protect your finances
Many young people feel they don’t need health insurance. They think that health insurance is for older folk. They may feel fit and healthy and thus, protected. But medical issues can crop up at any time without warning. For instance, appendicitis is a common issue that occurs without warning. Once diagnosed, a patient needs surgery within 24 hours.
Let’s consider another situation. A youngster in the prime of his health has an accident on the road. He may need to be in the hospital for a considerable period. Such contingencies are a financial burden. Health insurance is a way to prepare for these cases.
You need health insurance to protect your health
When it comes to health, it is always good to be one step ahead. Often, medical issues start out small. But if ignored, they may turn into bigger issues in no time. Without health insurance, people may ignore these small issues. Preventive care is the best approach in this regard. And a good health insurance permits you the luxury of preventive care. You need such care to maintain your health.
Health insurance reduces the worry of medical costs. So, there is no hesitation to go for a check-up at any time.
To sum up
The age-old adage ‘health is wealth’ is still apt today. To give it a modern spin, you can say that poor health can deplete your wealth. The big hospitals and medical bills can take a huge toll on your savings. Health insurance is a simpler cost-effective alternative. You have two choices here. You can pay a small sum every year and be safe. Or, you can shell out a huge amount at the time of a crisis. The choice is yours. But if you make the right choice, then both your medical and financial health will be taken care of.