Money & Business

What’s the difference between life and health insurance?

Insurance policies come in a multitude of forms. Each covering their own niches and providing financial support to specific needs. Based on the premiums you pay monthly, your policy will dictate which benefits you’ll be able to receive. Two of the most common policies for personal use are life and health insurance.

Learn what differentiates the two and make an informed decision on which plan to take.

A life insurance policy’s main arrangement, once matured, is providing a lump sum of money to the policyholder’s beneficiary upon death. The policy is for maintaining the beneficiaries’ (family) financial status upon losing the breadwinner. The sum is based on the contributions made and the company’s investment scheme.

Depending on the policy and premiums provided, the sum can also provide monthly pay-outs once it’s matured which can be considered retirement pension. Life insurance can be considered a savings investment, where you can opt for a policy that covers how you plan to manage your financial future, be it to finance a home, a child’s education, a marriage, or even medical bills. Unlike health insurance which provides a specific service, life insurance is a more flexible and comprehensive option.

Health insurance, on the other hand, only cover your medical needs but because of the specific niche they handle, most companies’ can provide you with the best medical professionals, providers, and rates. Health insurance can be very beneficial to individuals that have long-term sicknesses that need regular medical assistance or diseases that need specific treatment and professionals to cure (which are hard to find and schedule for). Policies also provide you with a number of beneficiaries which can use an altered medical coverage based on your plan.

Health insurance policies cover a comprehensive list of common ailments but you’ll need to pay additional fees for rare diseases to have it included in your plan. Health checkups can also be covered, or routine tests for individuals that have specific needs. Health insurance can also provide you the best rates for your prescriptions.

Having both life and health insurance is ideal, as they have different purposes that are both beneficial to the policyholder. However, life insurance is more comprehensive and flexible to your needs as these can also cover medical bills to an extent. Health is still paramount to wealth, so if you do have a history of illnesses, or are prone to injury/diseases due to your job or lifestyle, then health insurance would be a better option.

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