Difference Between Term Insurance and Health Insurance: Everything You Need to Know
Difference Between Term and Health Insurance Plans: An Overview
In today’s time, availing of insurance has become extremely crucial to plan for financial freedom. Though even after being cognizant of the same, the struggle lies in choosing between the several types of policies that are available today. Amidst such chaos, the intention is always to the available type of insurance policy that provides for maximum coverage and added benefits.
Out of a lot of such policies available, the two most debated ones that people contemplate to avail are term life insurance v/s health insurance policy. While policies such as term life insurance can save you and your family from a huge financial burden in the misfortune event of your death, medical insurance can help you provide for financial security by paying off your hefty medical bills. With the help of this article, we can explore the major benefits of both types of policies, understand their differences, and shall in the end help you decide which policy shall be the most suitable for you as per your requirements.
Types of Policies Term Insurance and Health Insurance
Health insurance is a subset of term insurance. It covers medical expenses, which may be incurred due to sickness or accident. Health insurance can be bought as a standalone or bundled with life cover under a single plan.
The premiums paid for health insurance are tax-deductible, which means you can reduce the taxable income you earn. Also, you can claim a deduction for medical expenses above 10% of your income and above Rs. 50,000 (in the case of senior citizens).
Health insurance plans differ in terms of the benefits they offer. Some cover hospitalization expenses only, while others also cover outpatient treatments. Similarly, some health insurance policies provide coverage for pre-existing conditions and maternity benefits. It would help to choose a plan that offers these benefits based on your lifestyle and needs.
Having insurance protects you from unforeseen expenses. When you're young, it can feel like money doesn't matter because there are so many years ahead of you. But as the years pass, you must start saving for retirement or other goals.
What is a Term Life Insurance Plan?
A term insurance plan can be defined as a contract between an insured and an insurer company. Such insurance helps the policyholders by providing financial compensation in case of any unfortunate circumstance of the death of the holder. Therefore acting as an aid to the family members of such insured in times of trouble.
Term insurances are usually taken for a fixed period of time and are generally convertible into permanent life insurance. A term life insurance plan has proved to be worthwhile for many reasons. For instance, if you want to be secure at times of uncertainty and set your family free from going through unwarranted misery in times of unfortunate circumstances. Also, if you are the sole bread earner in your family, then pre-planned term life insurance can literally save your day.
Let us see some of the benefits of term insurance.
- A term insurance policy evidently helps you to establish a sense of financial freedom for you and your loved ones by providing financial security.
- Term insurance is appealing because it is most affordable as compared to the other life insurance policies that are available. To start a premium on term life insurance, you can easily do the same at the age of 18 with the minimum amount between Rs 400-500 on a life cover of up to Rs 1 crore.
- It also helps you to avail the tax benefits. This is because as per section 80C of the Income Tax Act 1961, an insured can claim a maximum deduction of 1.5 lakhs on his total income to lower his tax liability.
How To Buy Term Insurance at Finserv MARKETS
There are several ways you can buy term insurance at Finserv MARKETS, including:
Online. Visit www.finservmarkets.com/enroll and click on "Term Insurance," or search for "term insurance" in our online comparison tool to begin the process of finding the best policy for your needs. Our comparison tool will ask you a series of questions about your health, lifestyle, and personal circumstances so that we can recommend two or three policies that we think are most suited to your needs. After submitting this information, we'll send you an email with details about each policy and links to purchase it directly from us (if applicable). From there, all left is filling out an application form – which takes less than five minutes - and waiting for an agent from Finserv MARKETS to call with pre-approved rates by phone or email!
If you buy one of these policies, we'll even help you find a provider that matches your situation. Then we'll connect you directly with them so they can take care of all the paperwork on their end.
It's that simple. And best of all, we'll never charge you a dime for any advice or help – not even when you purchase a policy.
If you want affordable life insurance coverage that fits your needs perfectly, you can't go wrong with Finserv MARKETS. Find the best policies at the lowest possible rates and terms – our most popular service!
What is a Health Insurance Plan?
Health insurance as the name suggests covers the health-related expense of the insured as offered by the insurance company. Such contracts pay for hefty medical bills and expensive surgeries of the insured policyholder and save an enormous amount of financial distress for such individuals. You can avail yourself of health insurance and start the premium on the same based on your age and financial requirements. You can also choose from many types of health insurance policies that are available on the market ranging from a family health insurance plan, unit-linked insurance, or even different insurance for your senior-citizen parents or grandparents with the added benefits.
Let us see some of the reasons to avail of a health insurance policy
- A health insurance policy helps you to cover the cost of hospitalization. Especially if you are availing of private care for the required treatment, you may end up with huge medical bills, causing you extreme financial stress. Health insurance may help you to get away with that.
- You can avail yourself of a no-claim policy on health insurance to ensure that you shall not lose your premium amount, in case the benefit of your health insurance goes unused any year.
- Maternity claims and critical illness cover that come with health insurance can help you save your life savings as these incur huge expenses. This makes it extremely crucial for you to analyze your health policy requirements
How To Buy Health Insurance
Health insurance covers medical expenses. Health insurance is a form of insurance that covers medical expenses. It is a form of insurance that covers medical expenses. This type of insurance covers medical expenses.
Buying health insurance is a lot like shopping for anything else—except there's a lot more at stake. When you buy insurance, you're investing in your future health, as well as the financial security of your family. That's why it's essential to take the time to educate yourself on your options so you can get the best deal.
Regarding health insurance, there are two main types: term and comprehensive. Term insurance provides coverage for a specified period, while comprehensive covers a range of treatments and procedures throughout your life.
Difference Between Term and Health Insurance Plans
- The objective of the policy: Both the insurance policy provides a holder with the fulfillment of different objectives. A term life insurance covers you for a death benefit for a fixed period while the objective of health insurance is to save you from huge medical bills while you are going through an illness or an injury. Term insurance is mainly for your family to provide for after-death financial security while a medical cover helps curtail your financial expenses for the health of you and your family.
- Cost of the Policy: A term life insurance is generally cheaper than most of the available policies. While given the high cost associated with medical expenses today, the premium on health insurance is likely to be higher than the term insurance.
- Benefit of Renewal: While for term insurance you shall have to pay the same premium every year, many health insurance policies provide you with a no claim policy, which helps you to renew your policy by claiming such a bonus and avoiding the extra cost and loss on such premium, which shall not be available in case of term insurances.
- Tax Benefits: While both the insurance policies provide for tax benefits to the insured, term insurance is covered under section 80C of the Income Tax Act 1961 whereas health insurance is covered under Section 80D of the Act.
- Maturity Benefit: A term life insurance policy provides you with the maturity benefit in case of the expiry of the term of the policy while health insurance does not offer you the same benefit.
|Parameters||Health Insurance||Term Insurance|
|Coverage||Health insurance covers your family's medical costs.||Term insurance protects your family if you die.|
|Amount Guaranteed||The money promised pays for medical care and hospitalization.||A death benefit is paid to the policy's beneficiaries.|
Premiums are hefty.
|Returns||No refunds are available.||If the insured opts for return of premium benefits, they will get the premiums paid as survival/maturity benefits.|
|Cover-ups||Accidental death and permanent disability add-ons may expand the coverage.||You may add rider benefits including critical sickness, accidental death, and income return.|
Top 5 Health Insurance Plans in India as of August 2022
Following are the top 5 health insurance policies that are available in India. Please note that the figures are subject to changes as per the terms of the insurance provider companies
|Name of the Policy||Amount Insured||Age limit||No of Hospital Covered|
|Aditya Birla, Active Health Platinum Enhanced Plan||2 lakh to 2 crore||91 days-No Limit||10,000+|
|ICICI Lombard, Complete Health Insurance Policy||1 lakh to 50 lakh||91 days -18 years||6,500+|
|HDFC ERGO, Health Women Suraksha||3 lakh to 24 lakh||18 years-No limit||13,000+|
|STAR Health’s, Senior Citizens Red Carpet Health Policy||1 lakh to 25 lakh||60-75 years||12,000+|
|Care Youth, Health Insurance plan||3 lakh to 25 lakh||18-35 years||19,000+|
Top 5 Term Life Insurance Plans in India as of August 2022
Take a look at the top 5 term life insurance policies that are available in India. Please note that the figures are subject to changes as per the terms of the insurance provider companies.
|Plan Name||Entry Age||Policy Tenure||Sum assured||Claim Settlement Ratio|
|LIC Tech Term||18 to 65||10 to 40||₹ 50 lakhs||96.69%|
|HDFC Click 2 Protect Plus||25 to 65||5 to 85||₹ 10 lakhs||99.07%|
|Max Life Smart Secure Plus Plan||18 to 65||10 to 67||₹ 20 lakhs||99.35%|
|SBI Life eShield||18 to 65||5 to 80||₹ 35 lakhs||94.52%|
|Tata AIA Maha Raksha Supreme||18 to 65||10 to 40||₹ 50 lakhs||99.06%|
While both the types of insurance policy have their fair share of advantages, it is generally advised to either avail both or extends the benefits on a single policy to cover the maximum as possible, While term insurance can be extended with a medical cover, it may not, however, provide you the cover for a large sum on medical bills. Therefore keeping in mind the benefits as well the need of the hour you may choose to start premium on the selected policy as per your convenience but it is advised to do so as early as possible.
Which is Better life insurance or health insurance?
Choosing from different types of insurance available entirely depends on your insurance goals. Health insurance secures your medical bills while a term insurance helps you to provide financial security to your family in case of your untimely death.
Who is suitable for a term life insurance?
If you are someone who is a primitive bread earner in the family and have dependants for the financial responsibilities, then it is extremely crucial for you to avail yourself a term life insurance, to save your dependent from the financial stress of any misfortunate incident that may result in your untimely death.
Can I avail a loan against my health insurance?
Most of the insurance companies today as well as the renowned and the most leading Indian banks provide an insured with a loan against their health insurance policies. For an insured to avail of such a loan, he must have to use the insurance policy that can be used as the collateral, thus making it a secured loan.
What is Term Insurance?
The term policy covers you for a specific period, usually 10 or 30 years. If you die during the term of coverage, your beneficiaries will be paid a specified sum.
How does Term Insurance Work?
Term insurance works in two ways: by protecting against financial loss due to premature death and by offering permanent financial security for your loved ones.
What is Whole Life Insurance?
Whole life insurance combines life insurance with a savings account and investment portfolio (which can grow). Whole-life insurance is more flexible and gives more benefits over time. Thus their premiums are more significant. Whole-life insurance may have lower payment values if you cancel them before expiration, but premiums are not refunded after the policy is issued. Before buying, make sure you know what you're getting into!