Health insurance and life insurance are two important insurance policies. Both of these policies provide financial protection and stability to its policyholders for living a stress-free life. However, there are some differences between the two.
Differences between health insurance and life insurance
| LIFE INSURANCE | HEALTH INSURANCE |
| The insurance company provides a definite amount to protect against the financial loss that could arise from the sudden death of the insured/policyholder | It is a general policy. The insurance company provides a definite amount to the policyholder to meet their hospitalization and medical expenses |
| Money can be recovered upon the demise of the insured or at the maturity of the policy | Money cannot be recovered at the expiry of the policy but only as reimbursements in case of any health issues or if you do not claim for the money, you can get a Non-Claim Bonus for your next insurance premium |
| Generally long term | Generally short term |
| Premium is fixed or flexible and is paid either as a lump sum or as instalment | Premium is mostly fixed and is usually paid as a lump sum |
| Tax benefits come under Section 80C of the Income Tax Act | Tax benefits come under Section 80D of the Income Tax Act |
| Available mostly as an individual or group plan | Available in the form of individual, family floater, and group policy |
| The policies are mainly Term Insurance, Endowment policy, whole life policy, money back policy, Annuity or Pension plans, Unit Linked Plans. | There are many policies under Health InsuranceIndividual Health insurance, Family Health Insurance, Group Health Insurance Critical Illness Health insurance, Personal Accident plan, Unit Linked Health Plan, Maternity Health Insurance, Senior Citizens Health Insurance Plan |
Even though there are sharp differences between Life Insurance & Health Insurance, it is always beneficial to include both Health Insurance & Life Insurance in your financial planning.
The good news is that recently, the majority of the insurance companies started introducing ‘Combi Plans’. These are insurance plans that offer the benefits of both life insurance and health insurance. In ‘Combi Plan’, two insurance providers – one health insurer and one life insurer – join hands to offer the product, thus making it convenient and cost-effective for the customers.
