Life Insurance Vs Health Insurance

On the subject of shopping for insurance coverage, many individuals don’t perceive the distinction between life insurance coverage and medical health insurance. Each some of these insurance coverage provide a selected set of advantages and make it easier to cope with powerful conditions in case of a monetary emergency. Learn on to know the distinction between life and medical health insurance.  

Well being and life insurance coverage penetration in India 

As per Financial Survey, 2021, insurance coverage penetration in India is extraordinarily low at simply 3.76%. Nonetheless, after the impression of COVID-19, life insurance coverage penetration recorded a development of two.82% from 2.74% in 2018. Alternatively, a NITI Aayog report said that over 42 crore Indians do not need entry to medical health insurance. One other report said that 75% of Indians pay for medical bills out of their pocket. Whereas insurance coverage penetration continues to stay low in India, one should purchase insurance coverage to get the required monetary protection. 

What’s life insurance coverage? 

Life insurance coverage is a kind of insurance coverage that helps you safe your loved ones’s monetary future. It’s a contract between you and the insurance coverage firm, whereby, in case of your demise, the sum assured i.e. the protection quantity is paid to the nominee. In trade for protection for your loved ones, you need to pay the premium, which is determined based mostly in your age, earnings, medical situation, and many others. Premiums paid underneath life insurance coverage and the maturity advantages that are paid to the nominee are tax-free underneath the Revenue Tax Act, 1961. Shopping for life insurance coverage is a full-proof solution to construct a big monetary corpus for your self and your loved ones.  

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What’s medical health insurance? 

Medical emergencies are unsure. With the rise in way of life illnesses and medical bills, having a medical health insurance coverage can shield you in opposition to medical emergencies. Medical insurance is a contract between you and the insurance coverage firm underneath which you get monetary protection for the hospitalization bills. The aim of a medical health insurance coverage is to guard you in opposition to unexpected medical bills that you could have to in any other case bear out of your pocket. In case of hospitalization at a community hospital, a cashless hospitalization facility is supplied.  

Kinds of well being and life insurance coverage insurance policies 

Kinds of medical health insurance:

Particular person medical health insurance: Because the identify suggests, a person medical health insurance plan gives protection to a single particular person. This kind of plan gives protection for pre-and post-hospitalization bills, AYUSH cowl, OPD bills, organ donor, and many others. The premium for this sort of medical health insurance is charged based mostly in your age, earnings, medical situation, and many others.  

Household floater medical health insurance: This kind of medical health insurance gives protection to all members of the family. The premium for household floater insurance coverage is charged based mostly on the age of the eldest member of the family. A single premium have to be paid to avail protection for the whole household between whom the sum insured is shared.  

Senior citizen medical health insurance: Because the identify suggests, this sort of insurance coverage is designed for people above the age of 60 years. The protection is personalized based mostly on the necessities of an ageing particular person comparable to domiciliary cowl, OPD cowl, crucial sickness, and many others.  

Kinds of life insurance coverage:

Time period insurance coverage: It is a pure safety plan that gives your loved ones monetary protection for a selected tenure. In case of your dying anytime through the tenure of the coverage, the whole sum assured is given to the nominee. Time period insurance coverage is probably the most reasonably priced sort of life insurance coverage, providing you excessive protection at a low premium.  

Endowment coverage: This kind of life insurance coverage gives you with protection even on dying and survival. Part of the premium is allotted in direction of life cowl, and one other is invested. In case of dying through the coverage tenure, the sum assured is paid to the nominee, and in case of survival, maturity advantages together with bonuses if any are paid to the policyholder. This kind of plan is risk-free and gives assured returns.  

Cash-back coverage: In easy phrases, a money-back plan gives you periodic funds which might be a set share of the sum assured. On survival until the tip of the coverage, survival profit is paid out too. In case of your dying, the nominee is entitled to obtain the complete sum assured together with the survival advantages.  

Complete life insurance coverage: Because the identify suggests, a complete life insurance coverage coverage gives you with protection on your complete life or as much as the age of 100. The premium for this sort of coverage stays the identical for the whole time period. On dying, the nominee is given the sum assured together with bonuses if any. Together with nice tax advantages, this sort of insurance coverage additionally gives you with a mortgage facility which will be availed in opposition to the protection quantity.  

Unit-linked insurance coverage plan: This kind of insurance coverage gives you with insurance coverage in addition to funding. Part of the premium you pay is invested out there, whereas the remaining half is invested in direction of offering life insurance coverage cowl.  

This plan gives you with tax advantages underneath part 80C and a lock-in interval of 5 years. 

Distinction between well being and life insurance coverage 


Life Insurance coverage 

Well being Insurance coverage 

Goal  The first goal of a life insurance coverage coverage is to guard you with monetary protection. It could actually make it easier to shield your loved ones, construct a robust monetary corpus and fulfil your life objectives.  A medical health insurance coverage gives protection in opposition to unexpected medical bills arising because of hospitalization in case of an sickness or an accident 
Premium  Premiums for all times insurance coverage insurance policies typically stay fastened all through the whole tenure.  Medical insurance premiums range relying on the no declare bonus and your claims historical past, current medical circumstances, age, and many others. 
Tenure  Life insurance coverage is a long-term plan with a minimal lock-in interval being 5 years  Medical insurance is a short-term plan normally provided for a tenure of 1-2 years 
Sorts  Life insurance coverage is of varied sorts: endowment, a refund, and ULIP. and many others.  Medical insurance coverage is of varied sorts: particular person, senior citizen, household floater, and many others. 
Protection  This kind of insurance coverage gives you each survival and dying profit on the finish of the coverage time period or in case of the premature dying of the insured  Medical insurance gives protection just for medical bills and doesn’t provide any survival or dying profit 
Tax Advantages  Tax advantages are provided in direction of the premiums paid and the returns gained  The tax profit is obtainable on the premiums solely and there are not any returns supplied underneath medical health insurance 

Advantages of well being and life insurance coverage

Medical insurance advantages: 

A medical health insurance coverage gives you with the next advantages:

  • Safety in opposition to medical bills 
  • The complete sum insured is restored in case the protection is exhausted through the coverage tenure 
  • Protection for crucial diseases comparable to most cancers, kidney failure, coronary heart assault, and many others 
  • Protection for pre-and post-hospitalization bills 
  • Day by day hospitalization bills are coated 
  • Protection for organ donor bills and ambulance prices 
  • Maternity profit covers each varieties of supply i.e., caesarean and regular 
  • AYUSH therapies are coated 
  • Protection for residence healthcare bills 
  • OPD bills, ICU prices, and many others. are coated 

Life insurance coverage advantages 

A life insurance coverage coverage gives you with the next advantages:

  • Tax advantages as much as Rs. 1.5 lakhs underneath part 80C  
  • Tax-free payouts 
  • Assured dying profit 
  • Helps you financially safe the way forward for your family members 
  • Financially protects your future 
  • Helps you get peace of thoughts 

Confused about selecting life or well being cowl for workers? 

As part of worker advantages, you may provide staff group well being protection and group life protection. 

Group medical health insurance gives protection to staff and their households in case of a medical emergency, whereas group life insurance coverage secures staff’ households in case of the workers’ premature dying.  

Each group well being and life insurance coverage are provided at low premiums in comparison with particular person well being and life insurance coverage insurance policies.  

The premium for worker insurance coverage is normally borne by the employer, nonetheless, employers might also select to deduct the premium from staff’ salaries.  

If you’re confused between selecting well being or life cowl for workers, then it’s ideally suited to supply each varieties of insurance coverage cowl to staff because it helps them safe their well-being each financially and medically. Furthermore, it additionally helps them shield their households. By providing complete insurance coverage protection, your staff keep wholesome and get peace of thoughts understanding that their medical bills are taken care of, and their households are additionally financially safe. 

Providing insurance coverage cowl as part of worker advantages helps you witness larger worker productiveness, and low absenteeism, and boosts worker morale. 

Onsurity gives each group life and medical health insurance membership 

Understanding the significance of worker advantages and safety, Onsurity gives you group well being and life insurance coverage membership at an reasonably priced price.  

Onsurity membership advantages: 

  • Present complete protection to staff 
  • No paperwork concerned 
  • Present staff with wellness advantages like reductions on pharmacy, diagnostics, and many others. 
  • Teleconsultation facility 
  • Claims help 
  • Subscription model-pay each month based mostly on utilization 

FAQs associated to medical health insurance vs life insurance coverage 

Can I purchase each well being and life insurance coverage insurance policies?  

Sure, since each life and medical health insurance serves numerous functions, you may go for each these insurance policies. 

 What are the tax advantages provided underneath medical health insurance? 

Beneath medical health insurance, you will get tax advantages as much as Rs. 1 lakh underneath part 80D of the Revenue Tax Act, 1961 

 What sort of life insurance coverage ought to I purchase? 

You may select to purchase several types of life insurance coverage comparable to time period insurance coverage, ULIP, a refund, and many others. based mostly in your life purpose, earnings, and necessities.  

 What ought to my life insurance coverage protection be? 

Your life insurance coverage protection ought to ideally be 10 instances your annual earnings. As an illustration, in case you are incomes Rs. 10 lakh per yr, then the duvet quantity it is best to go for needs to be 1-1.2 crore. 


Useful resource Field – 

We’re Onsurity, the primary to pioneer month-to-month subscription worker healthcare and wellness in India, with affordability and accessibility assured. Whereas we disrupt healthcare in India, with complete healthcare, our wellness choices and experiences vary from health gives to unique LIVE classes for members. That is one such endeavour to encourage preventive well being however enhance the general ‘well being quotient’.

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