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Difference Between Life Insurance and Medical Insurance

Life and health insurance are two distinct forms of insurance coverage. A life insurance policy is essentially a contract between the policyholder and the insurer where, in return for the premium, the insurance company agrees to pay a predetermined sum assured amount to the nominees/beneficiaries in the event of the policyholder’s untimely passing away.

The three main categories of life insurance policies:

  1. Term life insurance

In the event that the policyholder passes away within a predetermined time frame, term life insurance pays payments to the nominees.

  1. Whole life coverage

Whole Life Insurance is the option you can select if you’re looking for an insurance plan that offers lifetime coverage. Typically, this insurance coverage has a fixed premium amount that provides the beneficiaries with a tax-free payout upon passing away or maturity. **

  1. Endowment policy

One common kind of life insurance is an endowment policy. Even if the policyholder is still alive on the policy’s maturity date, it results in a payout in the event that they pass away while the policy is in effect. *

What is health insurance?

In exchange for financial protection in the event of hospitalisation, the insured enters into a contract with the insurer known as health insurance. If you don’t have health insurance coverage in India, you might spend all of your funds in the event of a medical emergency.

These are a few of the most well-liked health insurance policies in India:

  1. Individual health insurance plan

In the event of hospitalisation, a person’s medical costs are covered by an individual health insurance coverage. The expenditures of hospitalisation due to illness or injury, surgeries, daycare operations, hospital room rent, etc., are all covered by this sort of insurance.

  1. Employee group health insurance

A group of people can benefit from group health insurance. Employees are covered by this health insurance plan as long as they continue to work for the employer.

  1. Senior citizens’ health insurance plan

A senior citizen policy is intended for those over the age of 60. This coverage pays for pre- and post-hospitalisation expenses brought on by illnesses, accidents, and medical expenses.

  1. Family floaters

You might think of this plan as a health insurance plan for the family. This family floater plan, for instance, can provide coverage for a family that consists of a husband, wife, two kids, and a pair of grandparents.

  1. Critical illness plan

These plans are designed to cover a particular disease or a set of diseases, like cancer. A fatal illness like that can deplete your finances. However, in the sad event that you are given a cancer diagnosis, a critical illness plan will provide a specific amount assured.

Life insurance vs health insurance

Listed below is the difference between life and health insurance.

Points  Life Insurance  Health Insurance
Concept Life Insurance presents an assured sum to the beneficiaries in case of the insured’s demise. Health insurance takes care of the cost of hospital/surgical expenses if the insured person is hospitalised.
Benefits Financial assistance for your family/beneficiaries even in your absence. Financial assistance in case of unexpected medical emergencies.
Tenure The coverage has a fixed and long tenure. It gets terminated once the tenure is over. The tenure is not fixed. The insured has the option to renew the policy once the term gets expires, which is generally a year.
Inclusions It includes survival and death benefits at the end of your insurance policy. No survival or death benefits are presented to the insured unless mentioned specifically.
Tax Benefits ** Tax advantages for a premium paid as per Section 80C of the Income Tax Act. Tax advantages as per Section 80D of the Income Tax Act. The tax benefit is subject to change in tax laws.

* Standard T&C Apply

** Currently, there are 2 tax regimes in India – new and old. To get the tax benefit you desire, choose the correct one after consulting an expert. You can opt for a regime change during the next financial year.

Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.

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