Life and health insurance both are mediums through which individuals minimize the risk of loss in the event of any causality; however there are many differences between the two. Let’s look at some of the differences between life and health insurance –
- Purpose – In life insurance the purpose of taking policy is to safeguard your near and dear ones in case of your death because if the person who has taken the policy then his or her relatives gets the claim whereas in case of health insurance the purpose of taking policy is to safeguard yourself from monetary loss in case of some serious illness as it covers expense related to hospitalization of insured.
- Period – The period for which life insurance is taken is extensive and generally ranges from 10 to 30 years whereas period for which health insurance is taken is short and it is generally a year after which depending on the choice of individual he or she can renew it for another year.
- Maturity – On maturity of life insurance if the individual is alive than he or she gets a fixed amount (if the policy states that insured will get amount if he is dead or on maturity whichever is earlier) on maturity of the policy, however in case of health insurance if one is healthy and has not claimed anything then he or she will not get any amount on the maturity of the policy.
- Complexity – While life insurance is simple to understand and therefore there is no complexity involved, however in case of health insurance there are so many provisions like covering limited number of illness, 24 hours minimum hospitalization and other such provision making it quite complex.
As one can see that both are quite different and people usually take both of them because on takes only life insurance than he or she is exposed to loss due to payment of heavy medical expense during illness while if one takes only health insurance than it expose the family to the danger of financial crises in the event of death of the person.