Difference Between Term Insurance and Health Insurance
Insurance has become an essential part of everyone's life, especially after the Coronavirus pandemic. We understand that your family is everything to you, and you want to see them happy and self-sufficient even when you are not around. There are different types of insurance policies in India that serve different purposes. Mostly, people get confused between Term Insurance and Health Insurance. Term Insurance is a type of Insurance that secures the future of your family in case of your unexpected death. On the other hand, Health insurance is insurance that offers financial compensation for your medical expenses in case of critical illness and hospitalization.
What is Health Insurance?
Health Insurance is a contract between the insurance companies and the insured person that an insurance company will cover the cost of the medical expenses of the insured person in exchange for a fixed premium. This policy can be purchased for an individual or a family, and it can be used to get proper medical care in case of an emergency or even a planned medical procedure without any fear of financial consequences.
What is the Need for Health Insurance?
The rising cost of healthcare expenditure every year is a matter of worry for everyone, no matter how much you take care of yourself, medical emergencies can strike at any time and can put your finances under a lot of stress. In such cases, it is wise to buy a health insurance plan with an adequate sum insured amount. Having health insurance assures you that you will receive much-needed financial assistance in case of a medical emergency. Moreover, a health insurance plan covers not only hospital charges and costs, but also pre-and post-hospitalization expenses.
Types of Health Insurance Plans
Below-mentioned are the types of health insurance plans in India:
What is Term Insurance?
Term Insurance is a type of insurance that provides financial compensation to the nominee of the insured in case of the unexpected death of the policyholder. Term insurance covers your family's financial needs even when you are not around. It is a type of life insurance that provides financial protection to the insured's beneficiary or nominee.
What is the Need for Term Insurance?
When compared to all other insurance plans, term plans have the lowest premiums. The benefits of a term insurance policy can be used to pay off any debts you may have accumulated, pay for funeral expenses, cover the costs of your children's education, and replace the future income that your family would still require to live comfortably.
Thus, if you purchase term insurance when you are still young and healthy, you and your family will be protected from any unexpected events. Term insurance is a necessity that should be included in everyone's insurance portfolio.
Types of Term Insurance Policies
Below-mentioned are types of term insurance in India:
Difference Between Term Insurance and Health Insurance Plans
| Term Insurance | Health Insurance |
| It offers financial protection to the family of the policyholders. | It covers the medical expenses of the policyholders. |
| It provides a one-time fixed amount to the nominee in case of the insured demise within the policy tenure. | The sum insured amount is paid to the insured person to be able to pay for hospitalization expenses in case of an accident, illness, or injury. |
| Policy premium is less. | The premium is charged on the basis of services taken. |
| The premium is paid annually, quarterly, half-yearly, monthly. | The premium is paid annually, quarterly, half-yearly, monthly. |
| If the policyholder survives the policy tenure of the term insurance and chooses a TROP plan, the insurer will refund the premiums paid to the policyholders. | There is a 'No-Claim-Bonus' benefit for not filing a claim during the policy period. |
| Waiver of premium, critical illness rider, accidental death, and permanent disability are the riders offered under Term Insurance. | There are various rider benefits are offered under health insurance such as critical illness cover, worldwide treatment cover, maternity cover, etc. |
Conclusion
Term insurance and health insurance are two of the most important types of insurance plans, and both have their own set of benefits. This is why both term and health insurance should be a part of your financial portfolio. Term insurance provides financial assistance to your designated beneficiaries in case of your death, health insurance is designed to cover medical expenses incurred as a result of hospitalization and/or serious illnesses. So, If you carefully read the benefits of both types, you will realize that you should buy both policies at some point in the future. It is better to make the right decision at the appropriate time before it's too late.
Last Updated : April, 2022
Naval Goel is the CEO & founder of PolicyX.com. Naval has an expertise in the insurance sector and has professional experience of more than a decade in the Industry and has worked in companies like AIG, New York doing valuation of insurance subsidiaries. He is also an Associate Member of the Indian Institute of Insurance, Pune. He has been authorized by IRDAI to act as a Principal Officer of PolicyX.com Insurance Web Aggregator.
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