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

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20-06-2022 |

The changing times have brought access to better health facilities, improved living conditions and higher standards of living. However, the hustle, competition and the daily grind have negatively impacted people’s lifestyles, leading to multiple health issues.

Lifestyle diseases, such as diabetes, hypertension, etc., are on the rise. The recent pandemic was also a wake-up call for many, reiterating the need for ensuring optimum protection for loved ones. Additionally, the exponential rise in medical inflation has further highlighted the need for health insurance.

Health insurance plans are perfect for planned or unplanned medical expenditure. You can buy an individual health plan for each member of your family or get family-floater health insurance for umbrella coverage. Health insurance allows you to rest assured about the financial aspects of medical treatment and focus on recuperation and well-being.

Apart from health insurance, the changing lifestyles and the recent pandemic have also highlighted the need for a term insurance policy. Term insurance plans are perfect for guaranteeing1 the financial security of your family in case of any eventualities - terminal illnesses, critical illnesses or even death of the life assured.

So, do you need both insurance plans or does having just one of them suffice? To ensure all-around protection for you and your loved ones and be prepared in case of any emergencies, it is advisable to get both health plans and term plans in India.

To underline the importance of both these plans, let us look at the benefits of each.


Top Benefits of Term Insurance and Health Insurance

HEALTH INSURANCE BENEFITS

Offers complete or partial coverage of planned as well as unplanned medical expenses. This allows you to ensure the best treatment and stress-free recovery without worrying about the cost of treatment.

Also covers ambulance costs, daily cash benefits, pre-hospitalisation expenses (tests, consultations), post hospitalisation expenses (medicines, physical therapy), etc.

Allows targeted personalisation with a wide range of plans offered by insurers, along with multiple optional riders# that enhance protection.

The premium you pay for a health insurance plan can be claimed as a tax* deduction under Section 80D of the Income Tax Act.


 

TERM INSURANCE BENEFITS

Offers an extensive life cover at pocket-friendly premiums. You get pure life insurance to ensure optimum financial protection for your family even in your absence.

Regular term plans in India offer no maturity benefits. However, you can opt for online term insurance with a return of premium2which offers a sum of all premiums paid as a maturity payout.

You can further enhance coverage and ensure complete protection with attractive term plan riders.

You can enjoy dual tax* benefits. Under Section 80C of the Income Tax Act, the premiums paid are tax-deductible* whereas the term plan payout is tax-exempt* under Section 10(10D).




So, why do you need health insurance?

To ensure financial support in case of planned or unplanned medical expenditure. A health insurance plan allows you or your family to avail the best treatment without worrying about the expenses. In today’s times, with the prevailing lifestyle-related health conditions and the ever-mutating coronavirus, the need for health insurance cannot be highlighted enough.


And, why do you need term insurance?

No matter how detailed your safeguards are, life is unpredictable. Amidst this, you will want your family to fulfil all their life goals and live a secure life even in your absence. A term life insurance plan offers an extensive sum assured to your family in case of your unfortunate demise. The payout can help financially secure your family, help them pay off any outstanding debts and live a stable life.

Thus, to ensure adequate protection you should buy both a health insurance plan and a term plan in India.


Term Insurance with Medical Cover

To make term insurance attractive for insurance seekers, life insurance companies offer a wide range of comprehensive plans that go beyond a simple life cover.

Some insurers offer comprehensive protection by combining a term plan with critical illness protection, health cover and so on.

For instance, at Tata AIA Life Insurance, we offer a wide range of plans to ensure you and your loved ones are protected against multiple circumstances. Our combination plans combine online term insurance with hospicare benefit, critical illness benefit, accidental death benefit and accidental total and permanent disability benefit, all under a single plan.

Thus, with Tata AIA term plans, you are providing not just a life cover but also protection against a wide range of eventualities. The critical illness benefit pays out a lump sum if you are diagnosed with one of the listed critical medical conditions. The hospicare benefit pays out a specified sum as daily cash benefit to help you take care of daily medical expenses or ensure daily financial benefit to the family.

Under accidental death benefit, an additional lump sum, over and above the base sum assured, is paid out to your family. With accidental disability benefit, a lump sum is paid out to help you manage the treatment costs, any loss of income and any costs you incur to make your home/vehicle disabled-friendly.

Thus, when you buy online term insurance with health cover, you get a wide range of additional health-related benefits. However, that still does not mean that you miss out on health insurance.


Why Should You Buy Both Health Insurance and Term Insurance?


Desktop Image Of Term Plan in India

Term insurance with medical cover is great for all-around protection, but health insurance offers more comprehensive support and covers a wide range of medical expenditures. With health insurance, you can rest assured about the health expenditure as and when it arises.

Health insurance takes care of all treatment expenses for critical illnesses. But the money is limited to the treatment costs and a few pre + post-hospitalisation expenses. When you buy term insurance with medical cover, you get a lump sum payout to take care of any other expenses, such as hiring a full-time nurse or taking care of any loss of income during your treatment, etc.

Similarly, in case of accidental disability, health insurance will take care of the treatment expenses, but term insurance with health cover will take care of any other expenses - wheelchair, full-time help, loss of income, etc.


Conclusion

Thus, every individual should include both health insurance and term insurance in their financial portfolio. Get a health insurance plan for complete financial protection during multiple medical expenses. Get a term insurance plan to protect your family’s financial security in your absence. Get term insurance with health cover to get some added protection over and above a health insurance plan and something more than just a life cover.

L&C/Advt/2022/Jun/1262

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Tata AIA Life Insurance

A joint venture between Tata Sons Pvt. Ltd. and AIA Group Ltd. (AIA),  Tata AIA Life Insurance  is one of the leading life insurance providers in India. We post everything you need to know about life insurance, tax savings and a variety of lateral topics such as savings and investments in this space. You can access and read a host of different blogs, articles and pages at the Tata AIA Life Insurance Knowledge Center or get in touch with us with any queries or questions!

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Disclaimer
  • Insurance cover is available under the product.
  • The products are underwritten by Tata AIA Life Insurance Company Ltd.
  • The plans are not guaranteed issuance plans, and they will be subject to Company’s underwriting and acceptance.
  • For more details on risk factors, terms and conditions please read the sales brochure carefully before concluding a sale.
  • This blog is for information and illustrative purposes only and does not purport to any financial or investment services and does not offer or form part of any offer or recommendation. The information is not and should not be regarded as investment advice or as a recommendation regarding any particular security or course of action.
  • Please know the associated risks and the applicable charges, from your Insurance agent or the Intermediary or policy document issued by the insurance company.
  • Every effort is made to ensure that all information contained in this blog is accurate at the date of publication, however, the Tata AIA Life shall not have any liability for any damages of any kind (including but not limited to errors and omissions) whatsoever relating to this material.
  • *Income Tax benefits would be available as per the prevailing income tax laws, subject to fulfilment of conditions stipulated therein. Income Tax laws are subject to change from time to time. Tata AIA Life Insurance Company Ltd. does not assume responsibility for tax implications mentioned anywhere in this document. Please consult your own tax consultant to know the tax benefits available to you.
  • #Riders are not mandatory and are available for a nominal extra cost. For more details on the benefits, premiums and exclusions under the riders please refer to the Rider Brochure or contact our Insurance Advisor or visit our nearest branch office.
  • 1Guaranteed Returns/Payouts depend on Plan Option, Policy Term, Premium Payment Term and Age at entry
  • 2Return of premium shall be the return of Total Premiums Paid (excluding loading for modal premiums and discount) by the policyholder at the end of the Income Period