You work hard to build a secure future for yourself and your loved ones. But what if the unexpected happens, and you’re no longer there to provide for them? This is where plans for health, term and life insurance come in.
Understanding the difference between health insurance vs life insurance vs term insurance is key to protecting your family’s future. While a health insurance policy helps with growing medical costs, term insurance ensures financial security for your family if you’re gone. In some cases, a critical illness insurance plan can also be a lifesaver. This blog will help you compare and guide you on which insurance is a must-have.
What is a life insurance policy?
A life insurance policy offers financial support to your family if you pass away. In case of your death, the insurer pays a lump sum amount to your dependents, helping them stay financially secure. You must pay regular premiums to keep the policy active.
This protection is important when comparing life insurance vs term insurance vs health insurance, as it offers long-term peace of mind for your loved ones.
What is health insurance?
Health insurance aims to cover medical and surgical expenses, including hospitalisation, treatments and critical illnesses. It serves as a financial shield during health emergencies.
A health insurance policy can also be customised according to needs and budget. There are two main types:
- Mediclaim
- Critical insurance plan
What is term insurance?
Term insurance provides coverage for a fixed period, or “term” (5-30 years) and is a simple and affordable type of life insurance. The family receives the sum assured if the policyholder passes away during this term.
Paying premiums regularly is necessary to keep the police active. Where life insurance policies, term insurance offers no payout if the policyholder survives the term.
When comparing term insurance vs life insurance vs health insurance, term insurance is ideal for those seeking high coverage at a low cost.
Health insurance vs term insurance vs life insurance
There are many insurers, and picking the right policy can be confusing. Here's a simple table to compare health insurance vs term insurance vs life insurance for fast understanding:
|
Benefits
|
Health insurance
|
Term insurance
|
Life insurance
|
|
Covers
|
Offers coverage against medical emergencies or claims within the policy tenure.
|
Offers coverage against the policyholder’s premature death within the fixed policy term.
|
Offers coverage/ sum assured amount on the maturity of the policy.
|
|
Premiums
|
The premium amount increases as the policyholder’s age increases.
|
Premiums are quite lower in comparison to other insurances.
|
Premiums are relatively higher than term insurance premiums.
|
|
Policy duration
|
5-10 years
|
10-30 to 45 years
|
5 to 30 years. Certain plans offer coverage up to 100 years.
|
|
Cash values
|
No cash value
|
No cash value
|
These policies build a cash value
|
|
Death benefits
|
It includes no death benefits
|
It provides death benefits if you die within the policy period.
|
It provides death benefits in case you die during the policy.
|
Term insurance vs health insurance vs life insurance: Which insurance is a must-buy?
Health insurance: Must-have
- It covers hospital bills & medical expenses
- It saves your savings during health emergencies.
- Essential for everyone, no matter your age
Term insurance: Must-have if you have dependents
- It pays a large sum to your family if you pass away.
- It is very cheap and offers full protection.
- Ideal if you have kids, a spouse or loans.
Life insurance: Not a must
- It combines insurance + low-return savings
- It is so costly, not great for investment
- Better to keep insurance and investment separate
Conclusion
When chosen properly, insurance is not only about safety but also a smart step toward long-term financial security. When you plan for early investment in term insurance vs health insurance vs life insurance, you not only safeguard loved ones but also bring tax benefits and peace of mind. With the right coverage in place, financial stability stays intact, no matter how uncertain life may be.
FAQs
- Which insurance should I buy first?
Buy health insurance as it protects you from high medical costs. If others depend on your income, term insurance is the next must-have.
- Is term insurance better than life insurance?
Yes, if you want full protection. Term insurance is cheaper and offers more coverage, while life insurance offers low returns and costs more.
- Can I skip insurance if I’m young and healthy?
No, buying early means lower premiums. Health issues and age can increase costs later, or even lead to rejection.
Disclaimer: The information provided in this blog is for educational and informational purposes only. It is not intended as a substitute for professional advice, diagnosis or treatment. Please consult a certified medical and/or nutrition professional for any questions. Relying on any information provided in this blog is solely at your own risk, and ICICI Lombard is not responsible for any effects or consequences resulting from the use of the information shared.