Insurance terms can sound complicated at times. Moreover, you may wonder about the need for different insurance plans. If health insurance deals with health, how does it differ from life insurance?
Health insurance or medical insurance – It is a type of assurance for the expenses on your healthcare services. In this, the medical insurance company agrees to pay for your healthcare costs and you agree to pay for their services in the form of premium, deductibles, etc just like fees.
In this case, you are registered with the insurance company based on your eligibility criteria and the decided premium amount. Thereafter whenever you need to avail the medical services that are included in your health insurance policy, your insurance company pays for those services. This too happens as per the decided norms at the time of buying the policy.
Here, if you do not file a claim for a specified period (claim free period), you may earn bonus points, which can help in reducing your premium for the following years. However, in health insurance you do not get the fees once paid even after policy ends.
Life insurance – In life insurance, not your health but your life is insured. In this, the life insurance company agrees to pay you a sum of money in case of an undesirable event of death or sometimes severe loss of function or partial disability. In life insurance, the insured is registered with the life insurance company and agrees to pay the fees just like premium, but with the knowledge that the insurance company will pitch in only in case of death or severe disability.
In life insurance, there are various types of policies, depending on the need. According to some policies, people may get their fees back after the tenure of policy ends in case there is no death. Whereas, some life insurance policies, like term end policies or accident insurance policies are meant only for life cover and the fees paid are not returned. However, in this case, the insurance company agrees to pay a huge sum of money in case of death.
Thus, to conclude we can say that health insurance covers your health and bears the expenses on your health in the form of consultation, treatment, hospitalization, etc. Life insurance covers your life and agrees to pay you a sum in case of loss of life or severe disability.
