Do I Need a Term Plan in India if I Have a Health Insurance Policy

Mumbai (Maharashtra) [India], May 8: Access to better healthcare facilities, improved living conditions, and higher living standards have all been made possible by the changing times. However, people's lifestyles have been badly impacted by the hustle, competition, and daily grind, which have resulted in several health issues. This has somewhat led to the prevalence of lifestyle diseases like diabetes, hypertension, and others. The recent pandemic served as a wake-up call, reinforcing the need to make sure loved ones had the best life insurance and health insurance protection possible.

However, one question that usually revolves around people's minds is if I have term insurance, should I still choose health insurance? Well, both serve different purposes and in this article, one would be able to understand which one makes more sense.

Let's understand the benefits of both Health Insurance and Term Life Insurance

Benefits of Buying a Health Insurance Policy

• It provides full or partial coverage for both planned and unforeseen medical costs. This way, you can guarantee the best possible treatment and a stress-free recovery without having to worry about the expense of medical care.
• Includes daily cash benefits, ambulance charges, pre-hospitalization costs (tests, consultations), post-hospitalization costs (medication, physical therapy), and other related expenditures.
• One can customise the health insurance policy with add-on riders to further increase the protection.
• Under Section 80D of the Income Tax Act, you may get a deduction for the premiums you pay for health insurance plan from your taxes.

Benefits of buying a term life insurance plans

• One can get extensive term insurance coverage at an affordable cost. To give your family the best possible financial security even in your absence, you need to have an adequate amount of life insurance.
• In India, standard term plans don't provide maturity benefits. On the other hand, online term insurance with a return of premium is an option that provides a maturity payout equal to the total of all premiums paid.
• There are many add-on riders one can purchase with term plans that provide total protection and improve coverage even further.
• With term insurance plans, you get the benefit of dual taxation. The term plan payment is tax-exempt under Section 10(10D) of the Income Tax Act, while the premiums paid are tax-deductible under Section 80C.

What separates term insurance from health insurance?

Although they both offer protection against financial strain, term and health insurance differ in a few important ways.

1. Goal: The purpose of health insurance is to cover expenses if a policyholder needs medical attention for an emergency or a pre-existing ailment. Term insurance is designed to give a safety net for surviving family members in the event that the policyholder passes away within the policy's term. The death benefit may enable surviving family members to maintain an adequate standard of living.

2. Payment: In the event that an individual needs medical attention while undergoing treatment for a disease or injury, health insurance pays a certain amount. If the policyholder dies during the term of the policy, term insurance pays out an assured amount as a death benefit.

3. Premium Costs: Term insurance can have inexpensive premiums for comparable levels of coverage, although health insurance premiums are typically higher.

4. Maturity Benefits: In the case of health insurance, benefits like lowered premium payment and an increase in the sum insured can be obtained if the policyholder does not use the services within a year.

5. Investment Plan: Although term insurance differs from standard investment policies in how it operates, policyholders who outlive their term insurance policy may be eligible to get an annuity of their premiums if the plan includes a premium return policy. However, certain insurance companies may offer market-linked health insurance plans, which would function as both an investment and a source of financial security.

So, which one to choose?

The sharp rise in medical inflation has also brought attention to how important health insurance is. A health insurance plan is ideal for anticipated or unforeseen medical expenses. For umbrella coverage, you can purchase individual health plans for each member of your family or purchase family-floater health insurance. With health insurance, you can concentrate on your recovery and general well-being while feeling secure about the cost of medical care.

In addition to health insurance, the necessity for term insurance coverage has been brought to light by the recent pandemic and changing lifestyles. Term insurance policies are ideal for ensuring your family's financial stability in the event of any unforeseen circumstances, such as terminal illnesses, serious illnesses, or even the death of the life assured.

So, is having one insurance plan sufficient, or do you need both? Get both health insurance and term plans in India to make sure you and your loved ones are protected anywhere and to be ready for any emergency.

Why Is Purchasing Term and Health Insurance Necessary?

While health insurance provides more comprehensive support and covers a wider range of medical expenses, term insurance with is an excellent option for overall protection.
You can feel secure knowing that all medical costs and expenses associated with critical illness will be covered for medical expenses as they come up with health insurance. Purchasing term insurance has its own benefits lump sum payment to your family in case of your demise or covering any income loss while undergoing treatment (if the additional rider was bought), among other things.

In an essence,

Every individual's financial portfolio ought to contain both term and health insurance. A health insurance policy will ensure total financial security in the event of medical bills whereas a term insurance policy will safeguard your family's financial stability if you are not around. To obtain additional security beyond a health insurance plan and something beyond a life insurance policy, one can always choose to have riders with either of the policies.