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Difference between Term Insurance and Health Insurance

Difference between Health Insurance and Term Insurance

Term insurance

Health insurance

It is an insured person’s protection cover over his/her family; it secures the family financially if the insured is no more.

It secures you and the family members added in your medical/ health policy plan from unexpected medical expenditure.

Provides the nominee with a onetime fixed amount in case the insured is no more.

It is like an invisible hand, helping you through the financial needs during the times of need, as and when required, there is no such specific time frame.

The premium charged is usually very less.

The premium charged is a little high.

The premium pay-outs are mostly annual, the cost per month is usually under 500 INR for an approximate cover of one crore, the general practice is to pay annually as the final amount doesn't really hurt the pocket much.

The premium pay-outs are mostly monthly, though some insurance companies also offer a quarterly, half-yearly or yearly premium pay-out as well.

It does not come with policy maturity advantages, it’s a financial blanket to the grieving family members, after the demise of the insured. If after the term of the policy the insured survives, the term insurance policy is terminated.

It does come with a no-claim maturity bonus or a rollover of the unused amount in some cases resulting in lower premium pay-outs in the following year.

This is not your regular investment policy, although if the insured person is alive and if the term insurance plan was the Premium return plan then he/she gets the benefit of claiming the premiums paid throughout the term. This premium refund is tax-free and, in a way, can be considered as a piggy bank safe.

This is an investment policy that helps you financially when you need it the most. Some health insurance policies also come in with a market-linked-investment plan.

Types of Policies

Benefits of Health Insurance and Term Insurance Plans