Life insurance vs. health insurance: what is the difference? is a question people often ask. While life insurance and health insurance are both important and valuable and are similar to each other, they are different. Understanding the differences between health insurance and life insurance is crucial when purchasing either type of insurance. Aside from the differences between them, you need to know how they work and which is best for you.
An important difference between these two depends on why and what you want the insurance to do for you. Life insurance is not a suitable option for those seeking insurance to cover medical expenses. However, you can get both insurance policies either from the same insurance company or separately. This is possible because they offer insurance coverage for two different events. This write-up contains insights into the differences between these two insurance policies to help identify which is best for you.
Differences Between Life Insurance vs Health Insurance
As previously stated, these insurance policies cover two different events and have different obligations. Health insurance offers coverage for medical expenses, while life insurance covers death expenses. Life insurance does not cover medical conditions and situations such as accidents and illnesses. Meanwhile health insurance does not cover burial expenses nor does it pay off beneficiaries after a policyholder dies. Below, the differences between these insurances are explained further.
Life Insurance
Life insurance is a type of contract signed between the insured and the insurance company that their death expenses is covered after they die. Purchasing a life insurance policy requires paying premiums for coverage throughout the policy years. Following your death, your premiums and cash value will be distributed to your beneficiaries to cover your death expenses.
Health Insurance
Health insurance is a type of contract made between an insurance company and the insured that their medical and health-related bills would be covered. A health insurance policy ensures that your insurance company covers your medical bills and hospital visits as needed.
- X-rays, diagnostic testing, and physical exams.
- Medications and drug prescriptions.
- Occurring treatments for chronic illness or health issues.
- Accidental injuries.
- Routine checkups and preventive care.
- Outpatient and inpatient surgery.
- Urgent medical care.
However, what your health insurance policy would cover depends on what insurance policy you get.
When do I need life insurance?
Just as mentioned earlier, life insurance pays off insurance death benefits to beneficiaries, either family or friends, after a policyholder dies. If you are the breadwinner of the family, you’re suffering from a medical condition, or you know your family will suffer a huge financial struggle when you die, you need to get a life insurance policy. Whether you are married or not, for some reason, you may still need to get a life insurance policy.
When do I need health insurance?
To avoid paying unexpected medical bills out of pocket every time, you need health insurance. This insurance is worth getting to help cover your medical expenses as well as drug prescriptions, hospital visits, surgeries, and so on. If your family has a genetic medical history or you are facing severe health conditions, you need to get health insurance to reduce the burden on your finances. Aside from these, you need health insurance if you are married or you are planning to be married soon. However, you may need to get health insurance if you are a student or your job requires it.
Life Insurance vs Health Insurance: Which Is Better?
Life insurance vs health insurance work in two different ways and serve different obligations; they are both unique in their way. Depending on what you need insurance for or what you want it to cover, which is better is determined. Life insurance offers financial protection to your loved ones after you die, while health insurance offers you financial protection throughout your lifetime. However, to find which is better for you, you need to consider different factors aside from what you want it to cover.
