Life Insurance and Health Insurance sounds like similar terms and many confuses to be the same thing. But though both having some similarities are different terms and policies. Life Insurance Policies are different from that of Medical Insurance Policies. Life Insurance pays for death benefits whereas Health Insurance pays for medical expenses and doctor’s fees and such expenses.
You might have heard about different insurance plans that help make your life easier. But did you know that life insurance and health insurance plans are two different insurance plans yet similar.
Let’s know what these two insurance plans does:
Life insurance pays out a death benefit to your beneficiaries in the case of premature death. The purpose is that the death benefit is sufficient to replace future income lost, as well as cover expenses and obligations outstanding such as funeral costs, medical expenses, and other debts – or to fund college savings accounts or spousal retirement. This gives the family continuity of their finances so they do not struggle after death. Providing life cover to the policyholder is the main objective behind opting for life insurance. The policyholder wants to be sure that his family or dependents can maintain their lifestyle in his absence. In an eventuality, proceeds from the life insurance policy will replace his income allowing his family members to lead a near-normal life as far as the household finances go.
On the other hand, health insurance helps pay for medical expenses such as doctor’s visits, hospital stays, medications, tests, and procedures. This helps ensure that people can afford their medical expenses and stay healthy. Health insurance aims at covering the actual cost towards treating illnesses/medical conditions subject to the sum assured. There is no life cover, meaning there is no payout on death.