Insurance And health insurance Nowadays it has become common for people of all ages. Both play an important role in providing you and your family with financial security in the event of a life-altering medical condition that may leave you unable to work or in the event of your death requiring care for your family. Why is it? In today’s scenario, youth are also considering themselves responsible for the income of their family. As this happens so often, the need for insurance becomes paramount. Before investing your time and money of any kind InsuranceHowever, you must first be aware of the major differences between life insurance and health insurance.
Life Insurance: Get Coverage for a Long Term
Life insurance is exactly what it sounds like, an insurance policy taken against a person’s life or, more specifically, in the event of their death. This financial safety net allows nominees, who may be members of your family, to retain certain benefits and financial assistance in the event of your death. Death benefits are income tax-exempt policies in most cases. Hence, the amount reaches the intended recipients without any deduction, if not. It helps to think of it as a foolproof future plan that covers you for a lifetime. The overall concept here is that this type of insurance is a long-term plan.
In life insurance, there are two broad categories which are ‘whole life insurance’ and ‘universal life insurance’.
1) Whole Life Insurance: This type of insurance is less expensive and comes at a fixed amount. It is also tax-free in most cases while providing payment. Unlike other forms of insurance, it is considered a low-risk approach.
2) Universal Life Insurance: A universal policy functions similar to providing payouts to nominees on the death of the individual but can also be viewed as an investment. The premium payment is more flexible and part of the payment is invested to add more cash-value. Due to the nature of investing a portion for higher returns, it is considered riskier and more expensive.
understanding health insurance
Unlike the long-term nature of life insurance, health insurance is a short-term plan. It serves the purpose of covering one’s immediate medical needs and bills in the event of certain types of illnesses or emergency procedures. The insured pays a fixed premium for health cover for himself or his family. Through such a policy, you can either get reimbursed for your medical expenses or pay the facility directly to the company to cover you. It can also go toward prescription drug coverage. Unlike life insurance, health insurance does not come with any death benefit or survival payouts, and no amount is refunded at the end of the policy term.
In terms of types of health insurance, there are three broad coverage areas – ‘individual health insurance’, ‘family floater health insurance’ and ‘senior citizen health insurance’.
1) Individual Health Insurance: This type of insurance is for one’s personal coverage. It covers your own medical expenses like treatment, medicine, procedures etc. It also has additional benefits like maternity benefit, OPD expenses, critical illness cover etc.
2) Family Floater Health Insurance: This can be taken as policy coverage for your entire family. Think of it as group insurance. Each member of the family or a few family members can be covered under a single policy. In addition, it offers coverage benefits similar to a run-of-the-mill health insurance policy.
3) Senior Citizen Health Insurance: As the name suggests it works. It provides coverage to people above 60 years of age, who can be classified as senior citizens. It has been customized in such a way that it functions by taking into account the diseases that are most common among seniors, as well as any specific chronic diseases that person may develop. It covers various physical and psychological needs as well like Domiciliary Care, AYUSH, Organ Donation Expenses and Critical Illnesses to name a few.
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