Cupcakes and muffins are both one and the same, right? Wrong.
Cupcakes have icing while muffins don’t. This is a small but important difference but many people confuse between the two.
Same is the case with health insurance and life insurance. Sure, both health and life insurance do protect an individual against an unforeseen event in the future. But they aren’t interchangeable. For instance, just because you have signed up for life insurance, it doesn’t mean that you are automatically covered for health benefits. Confused? Read on to know the differences between the two and how they play different roles in your times of trouble.
As the name suggests, life insurance provides life cover to the insured person. This means that in case of the insured person’s death, the life insurance policy provides a sum of money to the family. This is to ensure that the insured’s family is financially stable in his/her absence.
On the other hand, the purpose of health insurance is to cover the cost of treating medical illnesses. For example, if you are hospitalised due to a medical problem, your health insurance policy helps you meet the costs of your medical treatment. The degree of financial benefit you get would depend on your policy.
Also, it is important to remember that in case of death, a medical insurance policy does not offer financial benefits to the family of the deceased.
Why you need both
Clearly, it is important that you need both insurance policies as a protection against unfortunate events in the future. It is not a pick and choose situation. So, even if you do have a life insurance policy, make sure that you take out a health insurance policy too.
Rise in medical costs
These days, the cost of medical treatments is on the rise. Even a short visit to the hospital can result in huge expenses. This can upset your financial plans. So, whether you are single or a married person with a spouse and kids, it is always better to have a health insurance plan that covers your family against medical issues.
Health insurance vs Life insurance
|Health insurance||Life insurance|
|Premium||Based on the age, health and lifestyle choices of the individual||Based on the age and health of the individual|
|Coverage||Takes care of medical bills in case of illnesses or emergency situations like accidents||Offers coverage on death and permanent disability due to accidents or other natural causes|
|Limitations||Coverage can be limited to geographical location (based on terms specified in the policy)||Offers insurance coverage worldwide|
|Financial benefits on death||No||Yes|
The purpose of insurance is to ensure that you are safeguarded against unfortunate events in life. Both life and health insurance meet this criterion but serve vastly different goals. As an individual, it is better to have coverage from both these policies. But before you sign on the dotted line, ensure that you read the terms and conditions carefully so that you can get the best benefits from your policy.