Term Insurance vs Health Insurance – Know the Differences between Term insurance and Health insurance Plans

What is a Term Insurance Plan and why is it important?

The Term Insurance plan is a pure term insurance plan designed to provide a defined amount (lump sum) of money to members of your family, in case you are not around. The people you would like to nominate as beneficiaries will receive the money after the death of the policy holder.

Purchasing a term insurance policy is probably the most cost-efficient option you can choose to protect your family from financial losses. When contrasted to all competing insurance policies, term plans offer the lowest premiums. The benefits of a term life insurance plan might be utilized to settle debts and substitute future earnings that your household would require to live comfortably. Thus, purchasing term insurance plan while you are still young and fit helps protect you and your household from any shocks that life may throw your way.

What is a Health Insurance Plan and why is it important?

Health insurance is an agreement between the policyholder and the insurance provider that compensates all expenses involved with the policyholder’s medical bills in exchange for a specified payment. This coverage may be purchased for a person and utilized to seek proper medical treatment in an emergency or maybe even a pre-planned operation without fear of monetary ramifications.

Health crises may happen at any time, putting your funds under a lot of strain. In such instances, preparation ahead of time is the best option. The fundamental goal of a medical insurance plan is to protect and refund actual expenditures spent while treating diseases up to the policy amount promised. Obtaining health insurance provides you the comfort of realizing that you will receive much-needed monetary help in the event of a medical emergency. Furthermore, a medical insurance policy covers not only hospital charges and fees, but also pre-hospitalization as well as post-hospitalization costs.

Term Life Insurance Plan vs Health Insurance Plan

Pointers	Term Life Insurance Plans	Health Insurance Plans
Objective of the Policy	A term insurance is a policy under which the insurer agrees to pay a certain amount of money to the insured in case something untoward happens to the latter. This coverage, referred to as the sum assured, covers you for a predetermined period of time, referred to as the tenure. In simple terms, a term insurance is an assurance from the insurer that it will pay a fixed sum of money in case you die during the term of the policy. It basically acts as a financial cushion in case something goes wrong.	A health insurance plan is intended to reimburse hospitalization and healthcare expenditures incurred by the insured or any other person insured by the plan. The health insurance plan serves as a savior when any unforeseen circumstances arise causing harm to one’s health.
Maturity Benefit of the Policy	Except under return of premium policies, where the premium amounts paid are repaid at the conclusion of the plan period, there is no maturity benefit.	You cannot recoup any premium amount invested in a medical insurance policy. Since there is zero life coverage, there is no compensation or lump amount due in the event of the policyholder’s premature death.
Tax Benefits of the Policy	Section 80C exempts all paid-up term life insurance premiums (upto 1,50,000 INR).   Section 10(10D) allows for a complete tax exemption on a term life insurance policy’s death benefit if the yearly premiums payable are minimum one-tenth of the entire insured value.	Section 80D allows you to exclude health insurance payments made by you as well as your family.   If you purchase insurance coverage for yourself, your partner or, and your children, you can receive an annual maximum tax exemption of 25,000 INR. The maximum for older persons is 50,000 INR annually. If you cover your parents’ medical insurance premiums, you are eligible to claim annual maximum tax benefits of 25,000 INR given your parents are less than 60 years of age. In case of your parents being elderly citizens i.e. above the age of 60 years, you are eligible to claim a tax deduction of up to 50,000 INR annually.