Life Insurance Vs Health Insurance

As an earning member of the family, it is natural to consider getting life insurance to replace your income. Health insurance is another option that most people choose to curb hefty medical bills. Now, it is not advised to select just one of the two because they provide various benefits that cannot be replaced with the other. But if it is just one that you want to buy, here is a comparison of both the policies on certain vital aspects.

Insurance Policy Meaning

Life Insurance

A life insurance plan provides you with a life cover and protects you in the event of death. A lump sum payout is given to your beneficiary for stabilising their financial condition.

Health Insurance

Health insurance covers various medical expenses and other additional elements like ambulance cover and maternity cover amongst others. It aids in cutting down medical costs by a large margin.

Benefits of Policy

Life Insurance

There are several insurance plans that not only give a lump sum payout on death but also help you fulfil long term savings goal. Hence, you can go for a policy that has a maturity component or a regular payout feature. You can also surrender your life insurance plan in case you don’t have any dependency and get a lump sum value of the policy. Term insurance also enables you to maximise your coverage by adding riders to the plan and gain protection in situations like permanent disability, accidental death, etc.

Health Insurance

Health insurance secures you during medical emergencies and covers the expenses. The insurer has tie-ups with numerous hospitals where you can avail cashless hospitalisation. This insurance plan gives you extra features apart from hospitalisation like ambulance cover, vaccination expense cover, home nursing benefits, newborn cover, and much more.

Policy Duration

Life Insurance

Life insurance plan has a longer duration of 10-25 years where you can also avail a whole-life policy. As the name suggests, whole life covers you till you reach the age of 100 years.

Health Insurance

Health insurance covers you for a short-duration and has to be renewed periodically to gain the cover again.

Premium Payment Frequency

Life Insurance

You are enabled to pay your premiums with the help of four payment frequency modes which are monthly, quarterly, half-yearly and yearly. You can choose any of them as per your convenience and salary cycle.

Health Insurance

You could only find a lump-sum premium payment frequency for health insurance. But now you can also opt for a monthly payment mode and make regular payments.

Tax Benefits

Life Insurance

You can get tax benefits under Section 80C and Section 10(10D) of the Income Tax Act, 1961. The premiums paid towards securing term insurance can be claimed for deductions under Section 80C. Your family is also allowed to claim the death benefit as tax-free under Section 10(10D).

Health Insurance

Health plan allows you to claim the premiums paid for the policy under Section 80D of the Income Tax Act, 1961.

 

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