Health Insurance vs. Life Insurance: Which One Do You Need?

Understanding Health Insurance

Health insurance is an insurance product that offers a financial shield against medical emergencies. Whenever the insured faces a health scare and gets hospitalised, the insurance company provides coverage for the actual cost of hospitalisation up to the amount of coverage availed, depending on the terms and conditions of the policy.

In India, medical inflation is significantly rising every year and currently stands at about 12% to 14% per year. Lifestyle diseases are also on the rise due to stress and a sedentary lifestyle. Hence, health insurance has become an absolute necessity for everyone.

The following are the important features of health insurance:

1. Covers inpatient hospitalisation, pre- and post-hospitalisation, day-care procedures, domiciliary expenses, and more.
2. Health insurance plans come in many types – individual health plans, family floater plans, senior citizen plans, child health plans, critical illness plans and more.
3. Health insurance policies can be customised as per the individual’s or family’s needs. The coverage can be enhanced with the optional add-ons like maternity and newborn cover, critical illness cover and more.
4. Yearly renewal is important. Health insurance policies are also portable.

Understanding Life Insurance

Life insurance is a financial safety net that supports your loved ones if something happens to you during the policy term. Term life insurance is the pure and simplest form of life insurance that offers only life cover (predefined lump sum coverage) during a specified term. Various other types of life insurance combine both life protection and investment, such as endowment plans, unit-linked insurance plans, pension plans, etc.

The following are the key features of term life insurance plans:

1. Provide complete financial protection to dependent family members. The lump sum (sum assured) paid as death compensation offers financial security to the family. The amount can be used for kids’ education, debt repayment and more.
2. The policy offers no survival benefits.
3. Term life insurance offers a large amount of coverage at a low premium when bought at an early age ( when you are young and healthy)
4. Policy coverage can be enhanced with optional add-ons, such as critical illness coverage, accidental death coverage, and disability coverage.

Health Insurance Vs Life Insurance

Health insurance and life insurance are two distinct insurance products. Here are the differences between the two in various ways:

Health Insurance or Life Insurance - Which One Should You Opt For?

Let us break down insurance needs based on the phases of life to understand which one you need:

Young and healthy years ( 20 to 30 years of age)

In your 20s, you are healthy and young. Hence, you may not realise the need for both life and health insurance. You have just started your career, and you are covered by employer-sponsored health insurance. In this scenario, you can first go for life insurance coverage. Even though there are no dependents, buying at an early age helps you get the highest coverage at a lower premium, which will be beneficial for you in your later years. Considering the health uncertainties and the medical inflation, employer-sponsored policies may not provide comprehensive coverage. Hence, it is wise to invest in a comprehensive individual health policy or a family floater health plan that can also cover your parents.

Year of Responsibilities ( 30 to 50 years)

Health and life insurance are both critical needs at this age. You are married with children, parents are ageing, and responsibilities are more. Hence, you need a comprehensive health plan that can take care of your medical bills during emergencies and life insurance that can shield your dependents even when you are not around.

Pre-Retirement Years ( 50 years and above)

As you near your retirement, your kids grow up, and your responsibilities start to reduce. Health insurance and life insurance are still extremely critical at this phase as you and your partner are ageing. However, buying life and health insurance at this age can get difficult as you may not get the comprehensive coverage. Hence, it is important to invest in these two important necessities early in your life.

Both these plans are affordable when you buy them at your young age. At Jio Insurance Broking, you can avail of the right and affordable plans after careful comparison of the policies offered by various insurance companies.

Conclusion

To conclude, both health insurance and life insurance serve distinct and crucial roles in unforeseen times. Ideally, both are essential to secure yourself and your family against the uncertainties. Insurance is an essential cost, not an expense. It is wise to choose both health and life insurance to build a complete safety net.