A corporate health insurance plan is a type of health insurance that an organisation provides to its employees. A personal health insurance plan, on the other hand, provides coverage for healthcare expenses for a single individual alone.
Corporate health insurance provides coverage for medical expenses in connection with an illness or an accident. Some corporate health insurance plans allow you to extend the coverage to your family by paying an additional premium out of your own pocket.
Unlike corporate health insurance, you cannot extend the coverage to your family in personal health insurance. However, a personal health insurance plan offers more comprehensive coverage compared to a corporate insurance plan.
Health insurance is a type of contract between a policyholder and an insurance company that provides financial protection to the insured in the event of a medical emergency. The expenses covered under a health insurance plan include hospitalisation bills, doctor fees, medicine costs, and so on.
The health insurance company can make the payment directly to the hospital on your behalf, known as a cashless treatment, or it can also reimburse any medical expense that you had to bear, all depending on the type of health insurance you choose.
There are three main types of health insurance plans:
Individual health insurance is a policy designed specifically for a single person to protect and cover oneself against various illnesses, accidents, hospitalisation expenditures, and other medical emergencies that may occur over a lifetime. Individual health insurance policies also provide extra benefits like maternity care, critical illness coverage, OPD fees, AYUSH, etc.
Family floater health insurance, commonly known as health insurance plan for family an entire family under a single policy. The sum insured under this policy floats among all family members who are covered by it and protects against a variety of illnesses, accidents, hospitalisation expenses, and other medical requirements that could arise during a lifetime.
senior citizen health insurance policy covers medical expenses for adults over the age of 60. These health insurance plans are made specifically to offer financial assistance to senior citizens in the event of a medical emergency.
Life insurance is a contract between a policyholder and an insurance company in which the insurance company agrees to pay a sum of money to the beneficiary if the insured person dies or after a predetermined length of time in exchange for the premiums paid by the policyholder.
Most of the time, death benefits are exempt from tax. As a result, the family receives the assured sum with no significant deductions. Life insurance acts as a savings plan that your loved ones can access if you aren't around to meet their needs.
There are two types of life insurance policies:
Whole life insurance usually has fixed premium payouts and offers a tax-free sum assured to the beneficiary. Due to its consistency and low or no-risk strategy, this insurance is less expensive than universal life insurance. In certain situations, one may decide to take out a loan against this type of policy.
It is a type of life insurance that covers you for your entire lifetime. Since there is a savings account included in the policy, it is sometimes referred to as cash-value life insurance. A part of your premium payment is deposited into this savings account every month. This type of insurance is more expensive than Whole Life Insurance due to the nature of investing for higher returns, which might occasionally result in potential risks. The premium for such policies are flexible, and so are the death benefits.
Check out the below table to understand the difference between life insurance and health insurance:
Life Insurance Plans
Health Insurance Plans
Life insurance provides financial security to your loved ones in case of your death. The policy pays a lump-sum benefit to your family, which ensures there is no financial instability in your absence.
Health insurance specifically caters to your and your family’s medical needs. The policy covers medical and treatment expenses, daycare procedures, routine checkups, and more.
Life insurance provides death or maturity benefits to you and your family members.
Health insurance covers the medical care expenses incurred due to hospitalisation or any medical treatment.
Life insurance premiums are usually affordable and depend on factors like your age, income, lifestyle, etc. Each life insurance product has a calculator tool ( e.g. term insurance calculator) that helps determine the cost as per your desired plan.
Health insurance premiums are usually fixed and depend on several factors such as your age, health conditions, lifestyle, etc. You can use a health insurance calculator to determine the policy cost based on the coverage you need.
Many life insurance plans come with an investment or savings component such as endowment insurance, unit-linked insurance plans, etc.
There is no investment or savings component in health insurance.
Life insurance is a long-term plan with a fixed policy tenor.
Health insurance is a short-term policy. You need to renew it every year to continue getting its benefits.
Life insurance is mainly used to provide a financial safety net to the family of the policyholder (especially if they were the sole earner in the family).
Health insurance is used to get financial coverage against medical emergencies.
The benefits associated with a health insurance policy and a life insurance policy do vary. Let us take a look at the benefits that health insurance and life insurance bring with them.
The primary goal of health insurance is to ensure that you receive the best medical treatment possible without having to worry about your finances. Health insurance policies provide protection from unanticipated medical emergencies. The premium paid every year for the policy entitles you to tax benefits, which is just one of the many advantages of having a health insurance policy. Opting for add-ons assists with availing extra benefits and increasing the protection cover. Some of these benefits and add-ons of health insurance are as follows:
Critical Illness Cover: Opting for this add-on helps to cover hospital bills if the insured is diagnosed with a critical illness
Maternity benefits: Maternity health insurance ensures that maternity and other additional costs are covered. It covers both prenatal and postnatal care, as well as childbirth
Hospital daily cash benefits: A daily cash benefit policy is a type of defined benefit policy that pays a certain amount for each day of hospitalisation. Payments are made for a specified number of days during the health insurance year and may be subject to a deductible for a few days
Domiciliary Hospitalisation: If any of the insured parents or family members require home care in a condition that would have required hospitalisation, this health insurance benefit comes to help.
Accidental Hospitalisation: In the event of an accident, this benefit under your health insurance will pay for the ambulance, daycare services, pre-hospitalization, and post-hospitalization charges, including ICU, medicines, OT, doctor fees, tests, and other expenses.
Life insurance gives you the opportunity to build wealth and provide your loved ones financial protection while you are gone. Life insurance offers some of the major benefits that your loved ones can benefit from like:
It offers financial security and protection
The beneficiary receives a death benefit
Payouts are usually exempt from tax
The insured can also receive a tax benefit on income as a result of premium payments, under the Section 10(10D)of the Income Tax Act of 1961.
Here are some situations when you can choose health insurance over life insurance:
You should choose an individual health insurance plan for yourself if you do not have any dependents or family members that depend on you for their financial needs. Health insurance is also ideal for earning bachelors.
If you are married, you can opt for a family floater health insurance plan to secure your spouse, children, dependent parents, etc.
Moreover, if your family members are financially independent and have a sufficient amount of savings to take care of their future expenses, you can consider getting only a health insurance plan.
Here are a few situations where you can pick life insurance over health insurance:
A life insurance plan is a must if you are the sole earning member of your family.
When you have your spouse and your kids depending on you for their future financially--it is of utmost importance that you get a life insurance policy.
If you want to make sure that your children have the necessary funds to finance their education even after your death, then a life insurance plan is the way to go.
If you ask us, the answer is yes. A life insurance plan is worth investing in, especially if you want to provide financial support to your loved ones after your demise. Most life insurance products are affordable and provide extensive coverage at a nominal rate.
It is always best to have a health insurance plan to cover medical expenses (sudden and planned) instead of digging into your savings. Medical treatments and hospitalisation costs are soaring by the day. You cannot rely on your savings to cover sudden medical expenses. And even if you can, you will lose out on your savings. Therefore, buying a health insurance policy is worth it.
No. Life insurance and health insurance are two different insurance policies fulfilling two entirely different purposes in your life. You can read about them in detail in this article.
There are three types of health insurance plans in India:
Individual health insurance
Family health insurance
Group health insurance
Life insurance is broadly classified into two sections:
Whole life insurance
Universal life insurance
There are certain types of deaths that are not covered by life insurance policies. Those are as follows-
Death outside the country
Death due to natural calamity
Death due to unidentified illness
Death due to critical illnesses like Stage IV cancer, HIV, etc.
Although life insurance offers some of the major advantages, it also has a few disadvantages-
When compared to other investment-on-return-based plans and premium-based plans, sum assured values are typically less
The insurance can be quite expensive if you’re old and unhealthy.
Yes, you can cancel your life insurance plan whenever you want. However, it is important to do so by notifying your insurer and doing so in accordance with the company's rules and regulations.