Difference between Health Insurance and Term Insurance

Difference between Health Insurance and Term InsurancePolicybazaarAverage Rating / 5 ( reviews)
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We know that your family means everything to you, and you would want to see them independent and happy even when you are no longer around. Term insurance is often said to be the panic resolution for an overly emotional person. However, this statement made is not true at all. If you can set aside the amount of annual premium and buy something that gives you peace of mind that your family members will be taken care of even if you are no longer there, then why not?

The same holds true in the case of a health insurance policy. If you are someone who is concerned about your loved one’s medical wellbeing and is aware of the fact that you do not have any superpowers and that diseases do not come after asking for your permission – you will probably opt for health insurance, to keep the heavy medical bills afar, by bearing only a small cost for them.

It is important to be smart and plan ahead before it gets too late. Further in this thread, we are going to explain both health insurance and term insurance policies to you, so that you can decide the right choice for you to opt for.

What is Health Insurance?

In today’s fast-paced lives, as one grows, one also spends, the ever-growing living standards means spending more every day and bettering as well. Most of our savings stay only up to the first week of the month when we get our salary credit. However, after paying off the pending bills for the month, what you might be left with – is it enough to save you on a rainy day? Unfortunately, the answer for most of us is no.

The scariest part about those unforeseen occurrences is the uninvited expenses involved medically. With the large hospital bills and even larger invoices, health insurance is the one’s only savior in such a scenario. This kind of insurance can be your best friend when the policyholder or the individuals that are added on the policy falls sick, gets hospitalized, or needs any type of surgery or any sort of medical intervention, all the medical bills and expenses involved are reimbursed for the insured individual, and their life is sorted.

What is Term Insurance?

Your family members, without any doubt, are your world, and you would definitely go to any extent in your capacity possible to provide the best of life for them. A haunting question to consider, that is also the harsh truth of life – “what will happen to them once you are no longer around?” We all know it is impossible for one to be there till the end of time, but you can still manage to provide for and take care of them, doesn’t that make you a little calm? And the answer to this calm is Term Insurance.

Your term insurance policy will help in taking care of your family members’ financial needs even if you are no longer around. It is a type of life insurance plan that provides financial coverage to the nominee or the beneficiary of the insured individual.

Term Insurance vs. Health Insurance: The Difference

Term Insurance Health Insurance

It is a cover for the insured individual to provide protection coverage over his or her loved ones. It financially secures the family members if the policyholder is no longer around.

It helps in securing the policyholder and any other family members that are added in the policy contract against any unexpected medical expenses.

It provides the beneficiaries with a lump-sum payout in the event of the insured individual’s demise during the tenure of the policy.

It acts like an invisible helping hand, that provides support through the financial requirements in case of any medical emergencies, as and when required, there is no fixed time frame for the payout.

The premium charged on term insurance is generally quite less.

The premium charged on health insurance is slightly high.

The premium payments are generally on an annual basis. The general practice of making regular annual payments as the final amount does not burden the pocket.

Generally, the premium payments are monthly, whereas, some insurance providers also offer quarterly, semi-annually, or annual premium payouts.

This type of insurance policy does not come with any maturity benefits; it is a financial safety net that provides support to the family members of the insured when he or she is no longer around. If the insured survives the term of the policy, the term insurance plan is terminated.

This type of policy does come with a no-claim maturity benefit or a rollover of the amount that is unused in some scenarios resulting in premium payments that are lower in the following year.

This is not one of the general investment policies, although if the policyholder survives the term of the insurance policy that was a premium return policy, then he or she can obtain the benefits of claiming all the premiums that had been paid throughout the tenure of the policy.

This is an investment plan that comes to financially help you when you require it the most. Some health insurance providers might provide policies that come with a market-linked investment plan.

 

The Bottom Line

To further conclude, if you closely understand what a term insurance plan offers and what a health insurance policy offers, you will also understand the fact that one will require these policies at some point in life sooner or later. It is better to make a choice that is informed and smart at the right time, especially before it gets too late.

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