Wondering what is the difference between life insurance and health insurance? Here are the details. Health Insurance and Life Insurance both seem to be the same considering they both cover the insured person against an unforeseen and unfortunate event. However, they are completely different by definition and the type of coverage they offer. Following are the differences between life and health insurance.
Health Insurance is a contract in which the Insurance Company agrees to pay for the medical and hospitalization expenses of the insured and the insured person agrees to pay a fixed premium.
Here, the coverage is against the risk of hospitalization and medical expenses.
It falls under under Section 80D of the Income Tax Act
Money invested is recovered in terms of reimbursement for medical expenses or if you do not claim it you get a reward in terms of bonus for your next insurance premiums.
Generally has a shorter term.
Life Insurance is a contract in which the Insurance Company agrees to pay the insured person’s nominee a fixed amount if the insured person dies.
Here, the coverage is against the risk of death. Hence, your nominee receives the payment.
It falls under under Section 80C, Section 10(10D) of the Income Tax Act
Money invested can be recovered on the maturity of the policy.
Generally has a longer term
Many Insurance companies offer competitive rates for both Health Insurance and life Insurance along with enticing benefits. Hence, ensure you do your research on difference between life insurance and health insurance before you dive in to the insurance pool.