Arguing between the significance of life and health insurances is like comparing apples and mangoes. Both are different concepts with different features and advantages. Let us consider the benefits of both the products to understand them in depth.
Life over Health
Life insurance is a product which aims to provide for the family in case of untimely death of the individual by paying the lump sum benefit that was opted for. Here’s how a life insurance policy scores over health insurance:
Providing for the loss of income: The sudden death of the bread-winner of a family takes away the source of income and puts considerable strain on the survival of the family. With a life insurance plan the death claim payable by the insurance company provides the much-needed financial help for the family to at least start afresh.
Income after retirement: A pension plan offered by a life insurance company takes care of the expenses faced post retirement. By providing a guaranteed source of annuity payments periodically, it creates a source of income needed in old age.
Creating Investment: A life insurance policy, besides providing a benefit in case of death, also provides for a maturity benefit where money is payable after the completion of the plan’s tenure. As such, it creates an investment which yields a corpus after a specified time period. Moreover, if a one buys a ULIP (or unit-linked insurance plan), the premiums paid are invested in the market. In a way, this plan provides attractive market-linked returns besides life cover protection.
Facilitating Savings: Having a life insurance plan necessitates paying premiums that makes you save your earnings. The compulsion of premium payment inculcates the habit of saving. After the completion of the term, such a habit rewards you with a lump sum corpus, which is usually greater than what you saved.
Tax Saving: One of the most appealing feature of life insurance is that it helps you in saving that tax which is payable on your income. As per the latest statutes, the amount of premium paid up to a limit of Rs. 1.5 lakh is free from tax and so is the claim received, which can be of an unlimited amount. Thus, a life insurance plan provides an avenue to create a tax-free investment.
Health over Life
Health insurance is a plan which takes care of the medical needs faced by an individual in an event of medical contingency that includes hospitalization. Thus, by providing for the hospital bills, the plan takes care of any financial strain caused due to a medical emergency. The following points tip the scales in favor of health insurance over life insurance:
Medical contingencies are more common: In the current age, medical emergencies are not rare. Illnesses and consequent hospitalization can result in huge medical bills. A health insurance plan can help in facing such expenses without too much hassle or burden.
High inflation in medicine: There is a rising trend in the cost of medical treatments as well as the medicines. A health plan can cover us against such inflationary scales.
Holistic Coverage: health insurance plans in India not only provide for hospitalization, but also for other expenses like ambulance charges, pre and post hospitalization expenses, maternity cover, cover for Ayurvedic treatments, preventative and wellness benefits etc. With such a huge scope of coverage, almost all of your medical needs will be taken care of.
Emergencies come without warning. It is best to be assured that you have a health cover to take care of medical emergencies and be insured that your family will not face a financial crisis in the event of an untimely death.
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