Imagine that you wish to purchase a car. You decide to visit a car showroom. There, you can find different types of cars: hatchbacks, sedans, SUVs, sports cars and so on. All of them come under the category of cars. But each car is designed differently and serves a different purpose.
Similarly, insurance is a very broad term. If you observe closely, there are lots of different types of insurance. Each type serves a different purpose and by knowing the difference, you can make use of these services better. Here, let’s understand the difference between health insurance and general insurance.
What is general insurance?
The fundamental goal of general insurance is to protect an individual against loss or damage of an asset. Continuing the above example, imagine that you finally decided to buy an SUV. The cost of the car is Rs 10 lakhs. This is a large sum of money and in case any damage occurs to the car, you could end up paying a lot of money towards repairs. A car insurance policy can help you avoid financial burden in case any damage occurs to your car.
Similarly, there are many other insurance policies such as insurance against theft, fire, accidents and loss of property. These come under general insurance.
What is health insurance?
On the other hand, health insurance is a specific type of insurance product that is designed to cover the cost of medical care. Everyone hopes to be as healthy as possible. However, sickness or personal injuries can come up at any time.
An office colleague, for example, who is suffering from a viral infection, could pass on the illness to you without your knowledge.
When you take a health insurance policy, you would be reimbursed for the expenses incurred in case of an illness or an injury. Sometimes, the insurance company pays for the expenses directly to the hospital. The financial coverage is of course, subject to the terms and conditions of your insurance policy.
Difference between health and general insurance
|General insurance||Health insurance|
|Meaning||Insurance that offers protection against loss or damage of an asset||Insurance that offers coverage for medical and surgical expenses of an individual|
|Example||Theft of electronic devices
Damage to motor vehicles
Loss of property due to fire
|Scope||Motor, marine, fire, theft, etc||You can take a health insurance policy for you and your family members (spouse, kids, parents)|
|Claim payment||The loss is reimbursed financially||Claim payment can either be cashless or reimbursed financially (based on medical bills and insurance coverage)|
General insurance and health insurance are two very different products. As an individual, you may need both products to protect yourself against unforeseen events. For example, a third-party motor insurance may pay for damages that occur to the other party in case you are involved in an accident. However, you don’t get reimbursed if you are admitted in the hospital for injuries that you sustain in the accident.
To sum up
To safeguard against such problems, make sure you are covered by a good health insurance policy, including additional accidental covers. This way, you can take care of medical expenses for yourself and your family.