Difference between Term Insurance and Health Insurance

The only thing certain in life is uncertainty. Humans have taken this knowledge to arm ourselves with foresight against the seemingly inevitable. The insurance industry was born of this knowledge and exists to hedge the insured against the risk of unfavourable financial outcomes that may come their way.There are various kinds of insurance policies offered in the market today, differentiated by what they protect. Two of the most popular and essential are Term and Health Insurance . Both of these aim to protect the policyholder and their family against risks to the policyholder’s own person. That being said, it is important to understand the finer differences between the two. Let us dive deeper into their characteristics, while understanding why it is important to hold each of these policies.

A term insurance policy is modeled to provide financial protection to the policyholder’s dependents, usually their family, in the event of their demise. It ensures that a predefined sum of money is paid to the beneficiaries declared by the policyholder in his policy after her death. At such a difficult time, the money can come in extremely useful for replacing the policyholder’s income that her family has come to depend on and to free them from any debts the policyholder may have raked up when alive. Term Insurance Plans protect your family from the financial aftermath of losing you.

health insurance is designed to protect you against the financial burdens of dealing with a medical emergency or even a chronic affliction. The policy ensures that the Insurance provider will cover the costs of hospitalisation and medical treatment in exchange for a fixed premium.The human body is fragile. Medical issues can crop up unannounced and can considerably impact your finances. It pays, literally, to exercise foresight in this situation. Health Insurance provides you with the peace of mind that your actual medical costs will be taken care of in the event of an emergency or even a pre planned medical procedure, upto the sum insured in the policy. Further, there are different health insurance plans that cover different types of treatments, and can be bought to provide protection not just for you, but also your family.

Term Insurance and Health Insurance both have their distinct benefits and are imperative decisions in your financial planning. While term plans ensure your family is protected even in the case of an untimely demise, health insurance plans provide the financial backing to fight health issues by covering the ensuing hospitalisation and medical care bills.

The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.