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Life Insurance vs Health Insurance

When planning for your and your family’s financial future, it’s important to consider buying health insurance as well as life insurance to get the best possible coverage. However, some people may get confused between health and life insurance and what their purpose is. In simple terms, a health insurance plan is a type of insurance that provides financial coverage for the medical expenses of the insured in case they are hospitalised due to medical conditions, illnesses, injuries, etc.

On the other hand, a life insurance plan is a type of insurance that provides financial security to the family of a policyholder who has passed away. In case of the untimely demise of the insured, the life insurance policy will pay out a lump sum which can be utilised by the family of the policyholder to take care of their future expenses. Let’s take a look at the differences between life insurance and health insurance.

Comparative Analysis of Life Insurance and Health Insurance

Health Insurance Plans

Life Insurance Plans

Health insurance specifically caters to your and your family’s medical needs (sudden or planned). The policy covers medical and treatment expenses, daycare procedures, routine checkups, and more.

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 covers the medical care expenses incurred due to hospitalisation or treatment.

Life insurance provides death or survival benefits to you and your family members.

Health insurance premiums are usually fixed and depend on several factors such as your age, health conditions, lifestyle habits, etc.

You can use a health insurance calculator to determine the policy cost based on the coverage you need.

The premiums for life insurance are usually affordable and depend on factors such as your age, income, lifestyle habits, etc.

Each life insurance product has a calculator tool (such as a term insurance calculator) that helps determine the policy cost based on your desired coverage and add-on benefits.

There is no investment or savings component in health insurance.

Many life insurance plans come with an investment or savings component such as endowment insurance, Unit-Linked Insurance Plans, etc.

Health insurance is a short-term policy. You need to renew it every year to continue availing its benefits.

Life insurance is a long-term plan with a fixed policy tenure. It does not require annual renewals to avail its benefits.

Health insurance is used to get financial coverage against medical emergencies. Life insurance is mainly used to provide a financial safety net to the family of the deceased (especially if the deceased was the sole earner in the family). 

When to Choose Health Insurance Over Life Insurance

Health insurance is a plan that primarily covers your healthcare expenses incurred due to hospitalisation. Any expenses arising from health-related crises (sudden or planned) are taken care of by the insurer. The insurance provider offers cashless claim settlement wherein you can avail top-notch healthcare services at network hospitals. In simple terms, whether it is a medical emergency or planned hospitalisation, a health insurance plan always keeps you prepared. 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.


When to Choose Life Insurance Over Health Insurance

Life insurance products available in the market ensure your family’s financial stability in case of unfortunate demise, disablement, or diagnosis of a life-threatening illness. You can choose from several life insurance products such as term insurance, endowment plans, Unit-Linked Insurance Plans (ULIPs), and more. 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 financial future, 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.

In Conclusion

Emergencies don’t knock on the door before walking into our lives. It is always better to be financially prepared than to face any financial instability later in the future. So, choosing the right mediclaim policy is essential. Browse different health insurance plans at Bajaj MARKETS. You can benefit from features like swift claim settlement, reinstatement benefits, bespoke insurance plans, extensive coverage, and so much more. So, why wait? Seek health insurance on our online platform, right away! Keep yourself and your family healthy with a good insurance policy. 

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FAQs on Health Insurance vs Life Insurance

✔️Is it worth buying a life insurance policy?

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. 

✔️Is it worth buying a health insurance policy?

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 these. If you do, you won’t have enough savings for your future goals. Therefore, buying a health insurance policy is worth it.

✔️Is life insurance a part of a health insurance plan?

No. Life insurance and health insurance are two different insurance policies fulfilling two entirely different purposes in your life. 

✔️What are the different types of health insurance plans?

There are three types of health insurance plans in India:

✔️What are the different types of life insurance plans?

There are various types of life insurance plans available, some of which are:

  • Whole life insurance

  • Term life insurance

  • Money-back insurance

  • Endowment insurance

  • Unit-Linked Insurance Plans (ULIPs)