Health Insurance vs Life Insurance Online in India

When life takes uncertain turns that affect our health, we fall back upon our loved ones – family and friends. There’s one more support that we fall back on – savings and finances. It is crucial to be financially adequately secured in order to fight any health hazard. 

At times, incidents can turn fatal, leaving family members vulnerable. At such times, one comfort that a person can provide the family members is ensuring financial support much after the person’s demise. This brings us to two important supportive tools – health insurance and life insurance.  

Health insurance vs. life insurance

Many people look at insurance as just an expense and they’re happy to have one – either life or health. Or, typically, people imagine that they might not ever need ch because they’re healthy and alive today. 

“It won’t happen to me”, is a common belief concerning health in India. Psychologists call it the optimism bias, which occurs when humans feel they are less likely to experience any negative events in their life. But life has other plans and one can never be sure about what challenge is next in store.

Let’s understand the benefits and importance of health insurance and life insurance and how to choose these insurance plans.

Health insurance

Health insurance covers healthcare and medical treatment related expenses. The most common coverage provided by health insurance is doctor’s consultation fees, hospitalization, pre and post hospitalization expenses, diagnostic tests, medical procedures, and daycare and in-patient expenses, among others. Health insurance can help individuals and families fight healthcare related needs with financial support and security. 

Benefits of health insurance

• It covers various kinds of medical expenses such as pre and post hospitalization, medication, cost of laboratory tests, and critical illness, among others.
• Some policies offer cashless medical treatments, which means there is no hassle of reimbursements.
• Many insurance policies also include free annual medical health check-ups. 
• Some health insurance plans include a co-payment clause, which requires both the insured and the insurer to make part payments.
• Health insurance policies provide tax benefits under section 80D of the Income Tax Act.
• Health insurance brings peace of mind and can keep financial worries at bay.

Types of health insurance plans

Individual health insurance: individual health insurance plans are single-person plans that provide coverage to individuals only. The premium for individual plans is determined by the age, the medical history, claims history, pre-existing diseases, and sum insured.

Family floater plans: family floater plans provide coverage for the entire family – self, spouse, children and parents. Certain family plans include extended family such as grandparents and uncles and aunts. The premium for family plans is determined by the age and medical conditions of the oldest member.

Group health insurance: group health insurance plans are often offered to employees by employers. Here, the premium is paid by the employer, but the coverage supports the employee. Such plans are preferred by businesses and organizations.

Critical illness health insurance: critical illness plans are dedicated to covering illnesses such as cancer, cardiac ailments, and kidney failure, among other specified health conditions.

Senior citizen health insurance: these plans are designed specially for senior citizens (age 65 years and more). The premium for senior citizen health insurance is generally higher than other types of insurance plans, as it is determined by age, health conditions, and the medical history of the insured senior citizen.

Specific illness health insurance: these insurance plans are designed to provide coverage for specific illnesses only, such as diabetes, and cardiac issues, among others. 

Life insurance

Life insurance provides financial support in the form of sum insured to the policyholder’s family after the death of the policyholder. If an earning member of a family dies, their dependents can receive the sum insured upon to cover household expenses, debts, loans and other expenses. Life insurance provides financial support and continuity to the family of the deceased. 

Benefits of life insurance

• Life insurance provides coverage towards death and death benefits
• Some life insurance plans provide maturity benefits as well
• Return on investments through bonuses, funds in case the life plan is an investment plan
• Life insurance provides tax benefits under section 80C of the Income Tax Act
• Options for loans provided the plan offers loan facility
• Assured income for family members
• Rider benefits

Types of life insurance plans

Whole life policy: in this policy, the policyholder’s nominee or a legal heir receives the sum insured after death.

Term insurance plan: this plan is for a specific period/term, for e.g. 10 years or 20 years. In this plan, the nominee receives the sum insured upon the death of the insured.

Endowment policy: a specific-period policy, this plan gives the sum insured and bonus, if any, to the nominee. In case, the policyholders do not die within the period, they receive the sum insured and bonuses.

Money back policy: Under this policy a certain percentage of insurance amount is paid regularly (to the person insured) during the lifetime of the policy.

Joint life policy: Under this policy, two or more individuals are jointly insured.

Unit linked insurance plan: These plans are linked to savings and investment instruments such as mutual funds, stocks and bonds and provide return on investment.

Both these types of insurances – life and health – serve different purposes. Some people choose to buy both, while some choose one between the two – life or health insurance. There’s one more option – a combi plan – with health and life insurance combined in one plan. Here’s a health insurance comparison guide.

What is a combined life and health insurance plan?

Combi plans provide both life and health insurance under one single plan. It allows the policyholder to buy a life insurance plan for self and a health insurance plan for self and family. 

A combi plan also provides tax-savingtypes benefits – there are many companies that provide such health insurance offers. Some of them are: HDFC Life and Apollo Munich, and IndiaFirst Life Insurance and Star Health Insurance, among others.

Health insurance vs life insurance – wondering how to choose between health and life insurance? Here are some tips:

• Check the claim settlement ratio of the insurance company; more importantly in the case of health insurance, as there are numerous exclusions, inclusions, and limitations.

• Check the eligibility factors of health, age, occupation, income and other factors that will determine the premium amount. This goes for both, life and health plans.

• The insurance claim and payment terms – you do not want your family to suffer a tedious claim process or difficulty in availing the sum assured, whether it is a health or life insurance claim. Hence, check these claim processes when buying a plan.

Both health and life insurance are necessary and serve different purposes, hence it is advisable to buy both types of policies. Having both these insurance plans would ensure protection against health emergencies and risks to life. Now that you are familiar with the details of health insurance vs life insurance and how to choose between the types of health insurance, reach out to us with your request.