No matter how much you save, there is never enough money to meet the huge expenses that follow when the breadwinner of the family dies or when you need medical attention. This is where life and health insurance policies come to the rescue. The following health insurance details will help you realize that both of these insurances have different roles to play.
Here are the differences between life and health insurance policies:
General insurance v/s health insurance – the coverage and purpose: A life insurance policy aims at financially protecting the family members/ nominees or dependents of the insurance policyholder while a health insurance aims at financially protecting the policyholder itself in times of medical emergencies, hospitalization and expensive treatments. A life insurance helps your family to maintain their standard of living and afford the necessities of life even after you are gone while a health insurance details out financial provisions that you may require from time to time to maintain and improve your health.
General insurance v/s health insurance – tax matters: You can claim up to Rs. 25000 on the health insurance instalments you pay per annum under section 80D of the Income Tax Act (1961). Whereas, with a life insurance policy, deductions on the premium paid can be claimed under section 80 C. Plus, as per section 10 D of the IT Act, the income from a life insurance policy is completely tax-free.
General insurance v/s health insurance – the formats: There are different types of life and health insurance policies. When it comes to life insurance, policies are mainly of the following type:
• Term Insurances (coverage only if the demise of the insured happens within a specified time)
• Whole Life Insurance (death benefit available for a lifetime)
• Endowment Plans (provide protection plus savings)
• Money Back Plans (a portion of the sum assured is paid periodically during the policy’s term)
• Retirement Plans (for senior citizens looking for a pension as well)
While health insurance plans are mainly classified as individual, family-linked, critical illnesses plan (for diseases that are severe, very expensive to treat but are less likely to occur), plans for pre-existing ailments, preventive healthcare plans, etc.
4. General insurance v/s health insurance – benefits: The additional benefits associated with life insurance include – maturity benefits and bonus if you survive the policy term. Mostly, the benefits are reaped after the demise of the insured or after the maturity of the policy.
With a health insurance, you get additional benefits intermittently, like – no claim bonuses on every renewal; free health checkups; coverage of doctor’s consultation fees, diagnostic tests, pharmacy bills, etc. (to a certain extent); cashless transactions at certain hospitals; etc.
Now that you are aware as to what is life and health insurance, get your health insurance today, if you haven’t already. For the best deals and maximum benefits get in touch with the financial experts at ManipalCigna Health Insurance.