Several insurance products are designed to help us deal with certain events in our lives. These products mainly offer us financial support for dealing with unexpected events. The term life insurance plan and the health insurance plan are the most preferred options from different insurance products. However, several individuals confuse the coverage and benefits offered by these two plans.
So, let’s learn about their differences.
What is Term Insurance?
Term insurance is a pure insurance coverage plan that is structured to offer your beneficiaries a lump-sum amount if something happens to you. The term policy offers one of the highest coverages at an extremely affordable plan. A pure term insurance plan is one of the best methods to ensure your loved ones are financially stable if something happens to you.
With a term insurance cover, your family will achieve their goals in life without worrying about the expenses associated. There are numerous types of term plans available in the market. Most insurers like Tata AIA offer additional benefits with the Tata AIA term plan. For instance, you get access to online medical consultation for dealing with health issues with their term plans.
What is Health Insurance?
A health insurance plan offers you financial coverage for dealing with medical expenses associated with medical emergencies or medical treatments. When you purchase a health insurance policy, you will have to pay the premium amount on time to keep the policy active and benefit from it. Therefore, the health insurance plan is one of the best ways to deal with the rising medical bills and high hospitalisation costs.
Difference Between Term Insurance and Health Insurance
Given below are some points illustrating the differences between health and term insurance:
|Parameters||Health Insurance||Term Insurance|
|Coverage||A health insurance plan will provide you protection when you or your family members are dealing with medical issues.||A term insurance plan is a protection plan that will secure your family financially if you pass away.|
|Maturity benefits||Health insurance plans do not come with a maturity benefit. The policy’s coverage is over when the plan reaches maturity.||A pure term insurance plan does not offer any maturity benefits. However, a return of premium term plan offers maturity benefits.|
|Death benefit||Health insurance plans don’t offer any type of death benefit.||Term insurance plans provide a lump sum amount if you pass away during the policy’s tenure.|
|Premium||The premiums for a health insurance plan are higher than term insurance plans.||Term insurance premiums have some of the most affordable premiums among different insurance plans.|
|Taxation||All the premiums paid for you, your family members, and your parents are eligible for income tax deductions as per Section 80D of the Income Tax Act.||All the premiums paid are exempted from taxation as per Section 80C upto ₹1.5 lakhs. A tax benefit is also provided for maturity claims as per Section 10(10D) of the Income Tax Act.|
|Tenure||A health insurance plan’s tenure may range between 5 to 10 years.||A term insurance plan’s tenure ranges somewhere between 10 to 45 years.|
Which One Should You Buy?
As the coverage offered by both insurance products is quite different, it is important that you carefully analyse your insurance requirements before making the purchase. However, opting for both insurance policies can be quite beneficial. With a health policy, you will get adequate medical cover, and the term insurance cover will ensure your loved ones are financially secure when you’re not around anymore.
Both term insurance and health insurance plans have their features and benefits. A health insurance plan is structured to offer you financial assistance for dealing with medical bills if you’re facing some health issues. A term insurance plan is designed to protect your loved ones if you pass away.