Life v/s Health insurance: Making a right choice

Having the security and comfort of knowing that you are financially secured against any health or life mishaps is a blessing not many have. Having a health insurance gives you the benefit of having a mental peace against any financial deficiency with regards to any unexpected detours that might occur in your health. Having a life insurance provides mental satisfaction that your family will not be facing any kind of financial issues post a mishap with you in your family.

When it comes to paying the premium for both the insurance policies, managing your monetary resources might get a little out of control and difficult. And eventually, it comes to a situation or point, where you might be tempted to give up on any one of the policy. Honestly, an individual may require both the types of insurance especially if you have a family which is dependent on you. In such a situation, the better idea is that you limit your coverage to what may be the ultimate necessitate in order to retain both. Though it is really essential that one should maintain both the policies, but if it is a scenario where you ought to choose one, it is probably a good idea to understand both the policies in detail.

The key difference between life and health insurance:

Reason:
The essential reason why you purchase a life insurance is to get financial support in the event of your death. That money can be utilized by your family as per their wish. They can use it either to maintain their lifestyle or use to build your child’s future education or perhaps for their wedding.  On the other hand, health insurance is purchased for a security with regards to hospitalization and other treatments. Companies also offer cashless treatment facilities at some network hospitals.

Coverage
In life insurance, a lump-sum amount will be provided to the person who is selected as a nominee by the policyholder at the time of their death. Health insurance covers financially for the treatment, illness and other medical factors of the individual, who is insured to the maximum amount that he is subjected to.

Additional benefits
Life insurance
possesses additional benefits such as surrender benefits, loyalty additional and maturity benefits etc. Best health insurance plan on the hand provides a No-Claim bonus. It is a bonus provided by the company to the policyholder for not making any financial claims throughout the period. Certain companies also provide annual free medical health-checkups as a part of the entire package.

Types of plans
Life insurance provides various types of plans such as term plans, savings, wealth-creation for child-related, retirement etc. When it comes to health insurance, it provides plans like comprehensive health insurance, critical cover illness etc.

Recovery of money
In the matter of life insurance, the amount of money invested as premiums can be recovered by the policyholder by the end of the period or as the policy matures. When it comes to medical health insurance, the money that has been invested cannot be recovered. The policyholder can only reimburse the money if and when any medical conflicts treatment.

Types of cover and the term of the policy
Life insurance provides individual cover and group coverage, whereas health insurance provides individual, family floater policy, group coverage. Life insurance is a long-term contract between the company and the policy-holder whereas health insurance is only short-term in nature.

It is also to be kept in mind that an individual’s policy must be updated constantly during the various course of life. For instance, a college-going student may need a different policy as compared to the one that is required by a parent with 2 kids. And, it is also essential to understand what kind of insurance is it that you are making of. If it is a life insurance, then is whole life assurance is what is best for you or annuity or term life insurance. To understand the difference between each and make the right choice which is the most beneficial for you and your family the most. With regards to health insurance, companies offer one or more types of plans.

Well, understanding the difference between the two is good, but what is more essential, understands these are two different elements covering different types of the risk financially. It is time to undertake a special consultation and get the financial planning sorted and perhaps decide wisely which the right policy is for you.

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