One cannot overlook the benefits of a life insurance policy when compared to a health insurance policy as they are many and varied that cater to all income groups of people.
However, despite the name ‘Health insurance policy’, there is no life cover which means there is no payout on death or any other death-like calamity like in case of life insurance.
Before getting to know why life insurance is important, it is wise to look at its pros in comparison with the health insurance and then choose.
Life Insurance Vis-a-vis Health Insurance
Both life insurance and health insurance policies provide insurance coverage primarily, yet they are not similar to each other in many respects. While both play a significant role in covering the expenses in one’s life, the very purpose of these two insurance covers quite differ based on several financial benefits that are triggered on various occasions and times in a person’s life. Health Insurance, also known as Medical insurance are the same and provide health coverage in case of an eventuality where one gets ill and needs a major surgery/treatment/hospitalization. Life Insurance, on the other hand, only covers the eventuality of death or the demise of an individual where the sum assured goes to the Nominee, usually a dependent of the insured. The money would come in advantageous for the dependents in case of an untimely death of the insured. However, this is only a primary difference and premise for both types of insurances. The contrast, nevertheless, doesn’t end here as they are manifold as mentioned down under: Primarily, Health Insurance is typically avoided by the younger generation of 20- and 30- somethings as they choose to forgo health insurance altogether in relation to a life insurance.
This is for the apparent reason that when compared to most other segments of the population, they have a much lower incidence of health problems and so rightly called by some health experts as “young invincibles.”
These young guns consider paying a premium every month more for life insurance than for health insurance.
With health insurance, there’s not enough choice as one has to obtain it anyway as they age and start having health problems but life cover is more useful for those who have kids or in other words dependents.
Here one can exercise their choice if they want to as they may not need a life cover if they don’t have kids who depend on their income.
There are more short-term and immediate monetary benefits in case of a health cover when compared to a life cover, and one can extend the benefits to his/her family or dependents also along with themselves.
In the case of life insurance, only the prime nominee can claim a majority of the profit than the rest of the family members.
Since life insurance policies are for a life term, one can opt for low premium policies possibly in their early 20s and pay without extra burden for as long as the plan continues which may not be that easy with a health insurance policy, particularly if the insured expects more health coverage with less premium.
Though in case of a life insurance cover, ‘the more premium, the better advantage’ rule applies in many cases, this need not be true in case of a health insurance policy where there are basically four types of plans usually available and for many, the Silver plan is enough to cover the general medical expenses at large than a more expensive Gold or Platinum plans which include significant medical expenses unless when incurred.
Deciding which life insurance plan to buy is all about one’s long-term planning and calculation of when and how they receive the benefits upon the completion of policy or their nominee when a calamity happens to the insured.
With health insurance policies, short-term planning will suffice and serve the individual and their family’s health needs.
Though in case of a life insurance cover, ‘the more premium the better advantage’ rule applies in many cases, this need not be true in case of a health insurance policy where there are basically four types of plans normally available and for many, the Silver plan is enough to cover the general medical expenses at large than a more expensive Gold or Platinum plans which cover major medical expenses unless when incurred.
Deciding which life insurance plan to buy is all about one’s long-term planning and calculation of when and how they receive the benefits upon the completion of policy or their nominee when a calamity happens to the insured.
With health insurance policies, short-term planning will suffice and serve the individual and their family’s health needs.
While the young and healthy singles can do away mostly with just a life insurance policy, people who have dependents need to rely on both health and life covers as the benefits are so diverse for each of them that choosing one over the other becomes verily difficult.
No matter the differences, the bottom line here is to buy the type of coverage one needs so that paying for both insurances at a time need not be that daunting for anyone who wishes to provide a safety net both for themselves and their family.
Therefore, the truth is any insurance is better than no insurance at all, primarily if one has dependents and are feeling pinched from a financial standpoint, it is better to buy whatever policy premium one can afford.
Why Is Life Insurance Important?
It is important to discern the importance of a life insurance cover because of the main benefit that it provides than the side kick-offs. Though many people are yet to realize, buying life insurance is not just one more investment option but one of the most important financial decisions that one can make in their life.
Not only financially, but it is also important otherwise that tells an individual how to care for their families in case of an unexpected emergency/calamity in their life. It could mean devastating consequences for their loved ones if they are unable to pay household and other expenses, debts and also maintain their standard of living with adequate finances.
More than purchasing the policy as a future investment option to better one’s finances, it is always good to buy a life insurance policy keeping in view of securing their family’s financial future.
Besides then, the added benefits of life insurance during one’s lifetime need not be overlooked especially if they are young. Given below are the best ten compelling reasons for one to opt for a life insurance policy:
1. Looking After The Loved Ones
This is the most critical aspect of life insurance that one needs to factor in. The family is dependent on the insured even after they are gone and anyone certainly can’t let them down.
Whether it’s paying back lost income, paying for the child’s education or making sure one’s spouse get the much-needed financial security, life insurance could save the day for one’s dependents who are survived after them.
2. Dealing With Debt
One doesn’t want their family to deal with financial guilt during a crisis. Any first-class debt – a home loan, personal loan, or a loan on credit cards – will be taken care of if one happens to buy an apt life insurance policy that can clear their debts.
3. Helps One Achieve Long-term Goals
Since it is an instrument that keeps one invested for the long term, it would help one achieve their long-term goals like buying a home or planning their retirement. It also provides with diverse investment options that come along with a variety of policies.
4. Life Insurance Supplements One’s Retirement Goals
Who wouldn’t like their retirement savings to last until they do? With a life insurance plan, one can ensure themselves of having a regular stream of income every month even post-retirement.
