Are you a believer in planning for the future. You should consider purchasing Life and Health Insurance policies if you are positive. You want to learn everything you can about these policies. Learn and improve your knowledge with us.
What is Life Insurance?
Life insurance is like a personal safety net that your family can access when you are no longer there to provide for their needs. It’s a relationship between the person who is insured and the insurance company. In the unfortunate event that the insured dies, the life insurance policy he/she purchased bears financial benefits for the beneficiary/nominee.
In most cases, the death benefits are exempt from income tax. The sum assured is paid to the beneficiaries without deductions. Life insurance provides insurance coverage for your whole life. It can be thought of as a future-proof savings plan that protects your family.
There are two major types of life insurance:
- Whole-life insurance usually comes with fixed premium payments and provides sum assuring to the beneficiary generally tax free and is fixed. Because of its low risk and consistency, this insurance is generally less expensive than Universal life insurance. This type of policy can be financed with a loan in certain cases.
- Universal Life Insurance provides a nominee with a death benefit but can also be considered an investment policy. Premium payouts are flexible and part of the payment can be invested to increase the cash-value of the sum assured. This type of insurance is more expensive than Whole Life Insurance and Term Insurance. The nature of investing for higher returns can sometimes lead to potential risks. This is why these plans offer flexible death benefits and flexible premiums.
What is Health Insurance?
Health insurance is a contract between the insured and the insurance company to provide you with a financial cover in times of medical needs. For his/her medical coverage, the Insured must pay a fixed premium.
Depending on the type of insurance you choose, you may be able to get your medical expenses reimbursed. Or, the insurance company will pay the medical expenses directly for you. Some health plans cover prescription medication costs.
There are three major types of health insurance:
- Individual Health Insurance – An individual health insurance is a type of policy customized for a single person, to safeguard and cover oneself from various illnesses, accidents, hospitalization expenses and, other medical emergencies that may arise in one’s lifetime. Individual health insurance plans can also offer additional benefits such as Maternity Benefit and OPD expenses, Critical Illnesses, AYUSH, and other benefits.
- Family Floater Health Insurance – A family floater health insurance is a type of policy customized to suit the entire family, under one single premium. This policy covers and protects all members of the family against any illness, accident, hospitalization, or other medical requirements that may occur during one’s life.
- Senior Citizens Health Insurance – As the name suggests, senior citizens health insurance is a type of health insurance policy designed for people above the age of 60. This policy is tailored to meet the needs of seniors and includes benefits like Domiciliary Care and AYUSH as well as organ donation expenses and critical illness.
Comparision Table:
| Life insurance | Insurance for health |
| Life insurance provides you with comprehensive coverage that covers all aspects of your life. It does not limit itself to one expense. It is actually the protection in the event of the insured’s death, when the sum assured goes towards the beneficiary. | Your medical/surgical/hospital needs are usually the only ones covered by health insurance. You can also get medical emergency coverage as needed. It doesn’t cover your medical expenses. |
| The type of Life insurance chosen will determine the premiums. They can be either fixed or flexible. Certain Life Insurance plans include future investment value policies to increase cash value. | Most premiums are fixed. Insurance that covers medical expenses is called health insurance. These plans are not designed to make money, but provide protection. In certain cases, one can receive a No-claim bonus. |
| Life insurance is a plan that lasts a lifetime. | Short-term health insurance is available. |
| Life insurance generally has a fixed term. The insurance policy is usually terminated after the term ends. | This type of insurance does not have a fixed term. Normal circumstances dictate that the insured renews the policy each year to maintain the coverage. |
| Life insurance is mainly protecting your family/beneficiary/nominee financially in the eventuality of the insured’s demise. | The protection of one’s health and that of your family is called insurance. It helps to prevent any untoward event such as financial hardships or loss of life. |
| Life insurance can offer both Survival and Death benefits depending on the type of insurance chosen. | Insurance does not provide a Survival or Death benefit. It only covers your current medical needs. |
| If you are unable to pay the premium, you can get the money back tax-free if you reach maturity. | The policy term ends and no amount will be refunded. The amount is refunded only for reimbursement of expenses incurred during the policy term. |
Life Insurance Plans: Benefits
- Life insurance offers two important benefits: financial security and protection.
- In general, payouts are exempt from tax.
- A guaranteed death benefit.
- Life insurance includes Tax benefits. However, a term policy should not be used to save tax. This policy provides tax benefits and exemptions according to the prevailing tax laws.
Health Insurance Plans: Benefits
Health insurance’s main purpose is to provide the best medical care possible without putting too much stress on your finances. Unexpected medical emergencies can be protected by health insurance plans. A health insurance policy offers tax benefits, such as the ability to pay a single premium and receive tax deductions for the amount of years you have insurance. To help our customers cope with any uncertain situation, we offer many other benefits and add-ons.
- Restoration benefit is coverage that your insurance company provides if your Sum insured has exhausted for treatment of an ailment. More about Restoration benefit in health insurance
- Critical Illness Cover – If opted for as an add-on or a part of the plan, this covers hospital expenses in case of critical illness.
- Daily Hospital Cash cover – This cover helps you manage the expenses beyond the hospital bill in case of any medical emergency.
- Maternity benefit – If opted for, this benefit covers the cost of hospitalization and any related expenses when a mother is admitted to labor. It covers any costs associated with any complications.
- Home (Domiciliary Hospitalization If your parent or a family member needs care at home for a condition that might require hospitalization, this benefit may be available to you.
- Pre- and post-hospitalization expenses We understand that there are some expenses that are not covered by health insurances such as scans, X-rays, or medicines. Therefore, we ensure we cover these costs.
- Accidental hospitalization This benefit covers the costs of Ambulance, Daycare, Pre-hospitalization, and Post-hospitalization expenses. It also includes ICU, Medication and OT fees, Diagnostics, and other costs in the event of an accident.
Life and Health Insurance are for anyone who worries about the future. Your medical needs are covered by health insurance. Life insurance provides coverage for your loved ones in the event of your death.
Life is unpredictable. It is better to be safe than sorry. These insurance policies are vital for everyone. It is up to you to decide which one you prefer.