Term insurance v/s health insurance: Which one to go for?
What's the story
Selecting the right insurance policy is often a challenging task for Indian families.
With so many options available, understanding the basics of term and health insurance is crucial.
This article will help you understand the key aspects of these insurances, enabling you to make informed decisions about your family's financial security and health coverage.
Basics
What is term insurance?
Term insurance is a life insurance policy that provides coverage for a certain period of time or "term."
If the insured person passes away during this term, the beneficiaries will receive the death benefit.
The premiums are typically much lower than other life insurance policies, making it a cost-effective choice for many families.
There is no investment aspect, it's just a protection plan.
Protection first
Benefits of term insurance
The biggest benefit of term insurance is its pure and simple objective: To ensure your loved ones are financially secure if you happen to pass away unexpectedly.
For a small premium (as low as ₹500/month), you can get a high sum assured that would be sufficient to cover your family's day-to-day expenses, children's education, and other future needs, without them having to dip into savings.
Coverage
What is health insurance?
Health insurance provides coverage for medical expenses arising from illnesses or injuries.
It can cover the cost of hospitalization, doctor consultations, medicines, and even pre- and post-hospitalization expenses in some cases, depending on the policy.
In India, given the escalating healthcare costs, possessing health insurance guarantees that you are not depleting your hard-earned savings during medical crises.
Financial safety net
Importance of health insurance
Financial strain caused by health emergencies is a burden you don't need to bear.
A strong health insurance plan is your safety net, covering those large medical bills so you can concentrate on getting well, not on how you're going to pay for it all.
Starting at roughly ₹5,000/year, you get a base plan with the option to enhance it with wider coverage benefits as per your requirements.
Decision making
Choosing between term and health insurance
Both term and health insurance are essential components of a robust financial plan.
Term insurance provides a safety net for your family's future in the event of your demise, while health insurance shields you from the burden of unexpected medical expenses.
Possessing both guarantees coverage against life's unpredictable aspects, creating a well-rounded buffer.
This dual approach offers financial protection and health coverage, fortifying against unexpected occurrences comprehensively.