Life and health insurance are two critical types of insurance policies that provide financial protection and peace of mind to individuals under the health policy in India. While both types of insurance are designed to safeguard individuals against unforeseen circumstances, they serve different purposes. Comprehending the differences between life insurance and health insurance can help individuals make informed decisions when it comes to choosing the best mediclaim policy.
Health insurance is primarily designed to cover the costs of medical care, such as doctor’s visits, hospital stays, and prescription medications. Health insurance policies can vary widely in terms of coverage and costs, with some policies offering more comprehensive coverage and higher premiums than others.
On the other hand, life insurance was developed to provide financial assistance to the policyholder’s beneficiaries in the event of their demise. Typically, life insurance policies pay out a single payment to the named beneficiary or beneficiaries, which can be used to pay for things like burial fees, unpaid debts, or ongoing living expenses.
Let’s examine some of the main distinctions between a health insurance plan and life insurance:
| Feature | Life Insurance | Health Insurance |
| Why should you buy this? | Protect your family financially in the event of your untimely passing. Even when you are not around, it can assist them in maintaining their way of life and achieving their objectives. | Covers the price of hospitalisation and associated medical care. These days, the majority of insurance provides access to cashless healthcare. |
| The core benefits | The nominee of the person (with life insurance) receives a Sum Assured (death benefit). | Covers the expense of medical care for illnesses and other conditions, subject to a cap on coverage and other restrictions. |
| Types of Plans | Term plans, Savings, child-related (wealth creation), Retirement, etc. | Comprehensive health insurance plans, critical illness cover, etc. |
| Additional Benefits | On top of the base cover, additional benefits such as those for maturity, surrender, and loyalty may be added. | Some policy types allow for the addition of cumulative bonuses. Only a few health insurance providers also provide free physical checkups.* |
| Types of covers | Individual (single life), Group coverage | Individual, family (family floater policy) or group coverage |
| Tax Benefits | Under Section 80C, Section 10(10D) of the Income Tax Act | Under Section 80D of the Income Tax Act ** |
Additionally, keep in mind that life insurance and health insurance are separate components of your financial portfolio that cover certain financial risks.
.png)
Life insurance and health insurance are two distinct types of insurance policies that serve different purposes under health policy in India. Health insurance pays for medical expenses incurred as a result of illness or injury, whereas life insurance supports the beneficiary of the policyholder financially in the event of their untimely demise. To choose the type of insurance coverage that best meets individual needs, it is crucial to be aware of the differences between the two and conduct a health insurance comparison.
* Standard T&C Apply
** Tax benefit is subject to change in prevalent tax laws
Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.