Difference Between Life Insurance and Health Insurance

26 December 2022
2 min read

Life and health insurance are two different products, but both are designed to provide financial protection in the event of your death or illness.

Life insurance is often used as part of a retirement plan, providing a lump sum payment to your beneficiaries after you die. However, it should be noted that this type of life insurance is typically purchased by an employer, who pays for it from the employee's monthly paycheck.

Individuals, families, and businesses purchase health insurance to cover medical expenses not covered by medical aid schemes. In addition, various health policies are available from private companies, government-run bodies, and self-funded projects.

Life Insurance VS Health Insurance

Life insurance and health insurance are both types of insurance that cover the costs associated with health or death. But they're not the same thing!

Here's the difference between life and health insurance based on various parameters-

Parameters

Life Insurance

Health Insurance

Core benefits

Sum Assured is paid to the nominee of the person. 

It covers treatment costs for illnesses, medical conditions limited to a maximum coverage amount, and other conditions.

Additional Benefits

Maturity Benefits, Surrender Benefits, Loyalty Additions, etc., are subject to choice.

No Claim Bonus can be added to some. Few offer free health check-ups as well.

Tax Benefits

Under Section 80C, Section 10(10D) of the Income Tax Act

Under Section 80D of the Income Tax Act

Types of covers

Individual or Group

Individual, family, or group.

Types of Plans

Term plans, Savings, child-related, Retirement, etc.

Comprehensive health insurance plans, critical illness coverage, etc.

Need

A financial safeguard for your family in case of your untimely death. You can help them maintain their life after you.

Covers hospitalization & treatment costs. 

 

You may also want to know the Difference Between Term Insurance and Life Insurance.

Conclusion

Life insurance and health insurance are two of the most important financial products you can buy. 

Whether you're trying to save for retirement, pay off debt, or take care of an existing mortgage, life and health insurance can help.

But it's not always easy to know if these products are right for you or your family. That's why we've put together this guide about the difference between life insurance and health insurance.

You May Also Be Interested to Know-

1.

The Life and Health Insurance Checklist

2.

Everything You Should be Knowing About Insurance Premium

3.

Best Health Insurance Plans in India 2022

4.

Best Term Insurance Plan in India 2022

5.

Best Child Insurance Policies in India 2022
 
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