How is Life Insurance Different from Health Insurance?

Health Insurance and Life Insurance are both meant to cover the insured against an unfortunate and unforeseen event but are totally different from the type of coverage they offer. Health insurance is an agreement between the insured person and the insurance company which states that the insurance company will have to pay for the hospitalization and medical expenses of the insured patient in return of the fixed premium whereas, life Insurance covers the insured against the risk of their death. In this agreement, the insurance company agrees to pay a fixed amount to the insured person’s nominee in the event of the insured’s death. There are a number of good insurance companies, which offer competitive rates for both health and life insurance along with enticing offers and benefits. But it is necessary to explore before diving into an insurance pool. In this blog post, we shall discuss the difference between both the insurance in detail. Take a look! 

1. Definition

As the name suggests, life insurance is an insurance plan that covers the risk of emergencies that can bother human life. The plan offers an assured sum to the nominee on the event of the death of the insured or to the insured itself on the expiry of the definite term of the insurance. On the other hand, an insurance plan was taken out by an individual to compensate the cost of their medical and surgical expenses, but only up to the amount classified as covered in the plan, is known as health insurance.

2. Benefits

Life insurance provides both survival and death benefits to the policyholder. On the other hand, health insurance offers medical and related treatment benefits to the policyholder in case of illness or accident.

3. Premium

The premiums for life insurance can either be paid in periodic intervals or lump sum, but are usually paid quarterly. On the other hand, the premium of health insurance is paid in lump sum for the entire term.

4. Recovery

In life insurance, the plan pays an assured amount to the nominee on the event of the demise of the insured or to the insured on the maturity of the policy. On the other hand, in health insurance, no money is recovered when the term of the policy expires but is reimbursed in case of any health issue.

5. Life

Life insurance is usually taken for a long-term in between 10 and 20 years and health insurance is taken for the short term in between one to three years.

The Bottom Line!

Health and Life insurance both indicates the same interests of benefiting the insured during the time of causalities but they both have different functions. While life insurance provides benefits and protection to the insured’s family during the time of their death, health insurance protects the insured from extravagant medical costs. But both the insurance requires the policyholder to pay regular premiums so that they can take utmost advantage during the right time.