Do I need Life Insurance if I already have Health Insurance?
07/09/20
A lot of people feel that they need to have either a Life Insurance plan or Health Insurance. That is probably so because both products protect you from unexpected financial burden. But, if you think about it, Life Insurance and Health Insurance serve two completely different needs.
To help you understand exactly how, a Life Insurance plan protects your family members in the unfortunate event of your passing as specified in the contract that you sign with your Life Insurance company. It protects your family by paying out a large sum of money so that they can be financially supported even when you are no longer around. Apart from that, you can also buy a Life Insurance policy for a specified period to support your long-term life goals such as your children’s education, marriage, retirement, etc. All of this makes Life Insurance a very important component of your financial plan.
On the other hand, Health Insurance is a type of insurance that covers only for expenses that arise from medical procedures, their treatment, medications, tests, hospital stays, etc. A Health Insurance policy offers no life cover or any payout to your family in the event of your unfortunate passing.
Thus, both Health Insurance and Life Insurance cover very distinct risks making the advantages offered from both very different too. Let us take you through some more specific differences for you to understand why having both Life Insurance as well as Health Insurance is the best way to go:
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Life Insurance |
Health Insurance |
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Risks Covered |
Life Insurance protects your family financially in the case of your unfortunate passing.
It can also be used to protect your short and long term goals. |
Health Insurance cover hospitalization costs as well as associated treatments, their medication, etc. |
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Paid to different people |
The Life Insurance payout is paid out on maturity or on death to the nominated members of the policy owner. |
The Health Insurance payout is paid to the hospital that is treating the medical condition or illness. |
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Different additional benefits |
Life Insurance policies come with various add-ons and riders such as accidental death rider, permanent disability rider, etc. that you can attach to your base policy. |
In the case of Health Insurance, there are no bonus options that can be added in certain types of policies. However, you may find some Health Insurance providing companies offering benefits such as free health check-ups.
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Tax claims under different sections |
Life Insurance tax benefits can be claimed under Section 80C and Section 10(10D) of the Income Tax Act, 1961. |
Health Insurance tax benefits can be claimed under Section 80D of the Income Tax Act, 1961.
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To conclude, Life Insurance and Health Insurance both are very important components of your financial portfolio as they cover distinct kinds of financial risks. While having a Health Insurance cover is good, it is wiser to have a Life Insurance policy as well to safeguard you and your family in the long run.
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