Life Insurance vs Health Insurance: What to buy?
3 min read
Apr 22, 2024
Investments are like building blocks for your wealth, while insurance is like a safety jacket. Life and Health Insurance are two important types, each serving a different purpose. Life insurance is like a parachute for your loved ones. If something happens to you, it's like a soft landing for them financially, providing them with money to help them keep going.
Health insurance, on the other hand, is like a shield for your body. If you get sick or injured, it helps protect you from the financial blows of medical bills, letting you focus on getting better instead of worrying about money.
Understanding Life Insurance and Health Insurance
Life insurance is a policy you buy to protect your loved ones financially if something happens to you. If you pass away, your Life Insurance policy pays out a sum of money to your chosen beneficiaries, which could be your family members or anyone else you designate. This money can help your loved ones cover expenses like funeral costs, mortgage payments, or other living expenses.
Health insurance is a policy that helps cover your medical expenses when you're sick or injured. With Health Insurance, you pay a monthly/annual premium to the insurance company, and in return, they cover the costs of your healthcare services. This can include doctor's visits, hospital stays, and preventive care. Having Health Insurance ensures you get the medical treatment you need without worrying about the costs associated with it.
Life Insurance vs Health Insurance
- Core benefits: The primary difference between health and Life Insurance is the core benefit it provides. Life insurance provides money to the family of the deceased person, whereas, in the case of Health Insurance, the core benefit is to cover the cost of treatment of any ailment or disease.
- Additional benefits: Life insurance provides investment benefits as your premiums are invested and returned to you with returns after the premium paying term. Health insurance provides additional benefits in terms of complimentary health checkups, routine tests etc.
- Types of covers: In Life Insurance, the types of covers include individual cover and group life cover. Health insurance provides cover in the form of individual cover, family floater or group insurance.
- Types of plans: In the case of Life Insurance, there are term plans, savings plans, retirement plans etc. In the case of Health Insurance, types of plans include normal Health Insurance, illness cover, rider covers etc.
- Tax benefits: Life insurance premiums are eligible for deduction under Section 80C of the Income Tax Act, 1961 up to ₹1.50 lakhs. Health insurance premiums are eligible for deduction under Section 80D of the Income Tax Act, 1961 up to ₹25,000 (₹50,000 in the case of senior citizens).
Why should you buy this?
Insurance policies act as a safety net. You should buy Life Insurance to provide adequate finance to your family in the event of your demise or to provide adequate corpus to live your retirement life independently. Further, to meet the medical expenses, you need to invest in a good Health Insurance policy. If you feel that you need enhanced protection, you can always opt for riders. Riders provide you with extra coverage over and above the normal coverage by the insurance policy.
Which insurance to buy?
Both Life Insurance and Health Insurance are mutually exclusive. You should have both for you and your family. This ensures protection against any kind of financial emergencies, a secure retirement life and a safety net for your family members in case of the demise of the insured person. However, choosing the right insurance partner is important to reap maximum benefits.
Axis Bank is a pioneering institution that has enabled numerous people to deal with financial complexities through comprehensive insurance plans. Whether it's about high medical bills, expensive vehicle repairs, Life Insurance protection or even medical emergencies while travelling abroad, Axis Bank ensures that you always have the right insurance policy in place. Explore now!
Also Read:Considering buying a life insurance policy?
FAQs
Q. Which is better, Term Insurance or Life Insurance?
It depends on your requirements. If you want only insurance benefits, you should invest in term insurance. In case you want twin benefits of insurance and investment, then you should go for Life Insurance.
Q. What kind of deaths are not covered in a Term Insurance plan?
This varies across different term insurance policies and the insurer. Normally, death due to self-inflicted wounds, suicides or critical illnesses are not covered in a term insurance plan.
Q. What happens to Term Life Insurance if you don’t die?
If you outlive your term Life Insurance policy and haven't renewed or converted it, the coverage ends, and there is no payout or return of premiums. This is why term Life Insurance is often recommended for providing financial protection during specific periods, such as when you have young children or a mortgage to pay off, rather than as a long-term investment or estate planning tool.
Disclaimer: This article is for information purpose only. The views expressed in this article are personal and do not necessarily constitute the views of Axis Bank Ltd. and its employees. Axis Bank Ltd. and/or the author shall not be responsible for any direct / indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Please consult your financial advisor before making any financial decision.
Disclaimer: Purchase of insurance product by Bank’s customer is purely voluntary and not linked to any other facility from the bank.
