Which is Better - Health Insurance or Term Insurance?

Do you have insurance yet? If not, it is time to think. Should you secure your family’s future with a term insurance plan, or ensure cashless hospitalisation and medical cover with health insurance? Choosing between the two can feel tricky.

Let us break it down, where you can understand the difference between health insurance vs term insurance to select the right one according to your requirements. Based on your age, priorities, and financial goals, you will know exactly which plan deserves your trust and investment.

What is a Health Insurance Plan?

With the growing medical costs in India, health insurance policies help avoid dependency on hard-earned savings in emergencies. Health insurance plans provide financial coverage when the policyholder needs medical care and or falls sick. It covers doctor consultations, surgery expenses, hospitalisation costs, diagnosis and other service expenses as per plan type.

What is Term Insurance?

A term insurance plan is an affordable life insurance to secure your family's future, supporting education, home ownership and paying off loans. It provides financial protection to the policyholder's family or loved ones in case any incident occurs during the policy term. For example, if a policyholder passes away during the policy's active time, the insurance company promises to pay the sum assured to the given nominee. 

Health Insurance vs Term Insurance: What are the Differences between Them?

Here is the difference between term and health insurance, as term insurance does not provide any policy benefits during the policyholder's lifespan. Policy term and renewal are major differences between term insurance and health insurance. 

Notably, some health insurance policies offer perks like free health check-ups and no-claim bonuses.

Which is Better: Health Insurance vs Term Insurance?

After understanding the differences between health insurance and term insurance, you must have learnt that insurance plans financially support policy owners and their families during emergencies.

If you are a sole breadwinner and have the financial responsibility to protect your family members and their goals, you may consider term insurance.

On the other hand, with the rising treatment expenses, you can choose health insurance to avoid draining your bank savings. Even having a family health insurance from Bajaj General Insurance gives financial protection against hospital expenses, surgeries, treatments and preventive check-ups for each member.

Therefore, review health insurance vs term insurance and understand which one is better for you according to your requirements. However, purchasing health insurance now will ensure you do not pay a hefty amount during medical emergencies.

What are the Types of Term Insurance Policies Available?

Level Term Insurance

This is the most common term insurance that offers a life cover at the cost of fixed premiums throughout the policy tenure.

Increasing Term Insurance

In this insurance, the premium amount increases each year to meet the life goals of the policyholder and their family in the rising living costs. It secures the financial needs of the policyholder's family members during unexpected contingencies.

Decreasing Term Insurance

This type of term insurance is useful for low liability, such as if you have an ongoing personal or home loan or mortgage. The premium amount of this policy decreases each year.

Convertible Term Insurance

This plan allows the policyholder to convert their existing plan into a whole life insurance scheme or an endowment policy.

Term Insurance with Return on Premium 

If you survive your entire policy term, you will get "return of premium", a refund of the entire premium at the end of the policy term.

Different Types of Health Insurance Policies

Individual Health Insurance

This plan gives financial protection for one person only, covering day care treatment, surgery expenses, and hospitalisation. You can add critical illness protection or OPD cover with Bajaj General Individual Health Insurance.

Health Insurance for Family

Unlike individual health insurance, it offers cashless treatment and a healthcare facility for your entire family at a single premium. It helps you save out-of-pocket expenses during an emergency for your parents or other family members.

Senior Citizen Health Insurance

This health insurance is designed for people above 60 years old. It covers pre-existing diseases, regular health check-ups, medicine costs, and diagnosis for seniors.

Critical Illness Insurance

Having critical illness insurance provides the maximum amount for major life-threatening diseases or conditions, like stroke, heart attack, liver or kidney damage, dialysis, coma, and cancer, with a waiting period.

Super Top Up Insurance

You can purchase a super top-up insurance plan as an extra layer of financial protection in addition to your basic insurance policy. Bajaj General Insurance's super top-up plans cover hospitalisation costs, including surgeries, doctor fees, diagnostic tests, medicines, anaesthesia, and implants.

Why Should You Have a Health Insurance Policy?

Quality Healthcare Access

Health insurance plans ensure that you have broad access to quality medical care services, such as diagnostics, hospitalisation, tests, medical treatments, medications, and therapies in case of an emergency.

Comprehensive Coverage

Annual health check-up coverage is another valuable benefit. Most health insurance plans provide annual health checkups to monitor health conditions and enable early detection of diseases.

Pre and Post Hospitalisation Expenses

Health insurance policies typically cover pre- and post-hospitalisation expenses. For example, buying health insurance plans includes financial benefits for clinical tests like X-rays, blood tests, and medications after discharge from the hospital.

Accidental Coverage

Many health insurance policies include personal accident coverage. It allows you to cover expenses related to accident treatments, thus making it wise to choose a plan with this beneficial feature.

Key Factors: How to Choose the Best Health Insurance Plan for You? 

Coverage Benefits vs Premium

The most vital aspect to consider while purchasing a health insurance policy is coverage benefits. Ensure your health insurance plans cover major hospital expenses, including treatment and surgery costs. Choose a plan with comprehensive coverage that covers maternity benefits, critical illnesses, outpatient therapies and daycare procedures at an affordable premium

Waiting Period

It is crucial to determine the waiting period for a pre-existing disease. Most health insurance plans often exclude certain treatments or pre-existing conditions from immediate coverage, but may have a particular. For example, Bajaj General Health Insurance plans offer a 30-day waiting period for pre-existing conditions.

Network hospital

The convenience of receiving quality medical services and cashless treatments depends on the network of hospitals. Your chosen health insurance plans must offer a vast network of hospitals in your nearby area with top-notch medical care facilities. For instance, choose Bajaj General Insurance plans and get access to more than 18400 cashless hospitals across India.

Claim settlement process

A good claim settlement process is important for a smooth experience during emergencies. Find an insurance company with a transparent claim settlement process that helps you lower your financial burden and stress of hospitalisation.

Final Statement on Health Insurance vs Term Insurance

Health insurance vs term insurance depicts that both are different, with varying coverage ranges, add-ons, benefits, and premium prices. A health insurance plan covers the expenses of medical treatments during emergencies. Health insurance often includes perks like cashless hospitalisation, OPD cover, ambulance coverage, and daily allowances during hospitalisation.

Choose wisely when purchasing term or health insurance from Bajaj General Insurance to ensure comprehensive global coverage.

FAQs

Are health insurance and term insurance similar?

No, health insurance and term insurance policies are not the same. A term insurance is a life insurance that protects your family with a lump sum payout in the event of your unfortunate death. However, a health insurance plan ensures financial compensation for hospital bills upon prolonged hospitalisation and critical illness. 

Can I buy health insurance and term insurance together?

Yes, you can buy both health and term insurance together for your family and yourself. They serve alternative purposes and provide additional financial protection. For example, term insurance offers protection to your family after your death. On the contrary, a health insurance plan covers your hospital bills and treatment expenses throughout your life.

What happens if someone survives a 20-year term insurance policy?

If someone takes a 20-year term life insurance policy and dies within the policy duration, the insurance company pays out death benefits to the policyholder's beneficiaries. However, if the term insurance policy period concludes without any claim, the person will not get any coverage or benefit aid.

Which one should I buy first: term insurance or health insurance?

You must start with health insurance to shield yourself from immediate medical expenses and avoid depleting savings during emergencies. Once covered, buy term insurance to secure your family’s long-term financial stability with an affordable death benefit that protects dependents against income loss.

What if I forget to pay my monthly premium on time?

If you miss your monthly premium on time, you will get an opportunity to pay the premium within the given grace period by the insurance company. Bajaj General Insurance allows an extra 15 to 30 days of grace period to pay the premium, keeping your plan active with remaining coverage.

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Disclaimer: The content on this page is generic and shared only for informational and explanatory purposes. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making any related decisions.