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Need assistance in choosing the right insurance plan? Get a call from our Expert.

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TATA AIA Life Insurance Co. Ltd will send you updates on your policy, new products & services, insurance solutions or related information. Select here to opt-in. T&C apply.

 

Term Insurance vs. Health Insurance

 

As a responsible earning member in a family, you have to plan your finances to receive adequate financial support during an emergency. There are different financial products that you can optimise for maximum protection and your family's well-being. 
 

Term insurance and health insurance are two different products with varied benefits that can help you handle financial emergencies. However, you need to understand the difference between them to benefit based on your requirements. Here is a detail to help you out! 
 

 

What is a Term Plan?

A life insurance term plan is an agreement between you and your insurer, wherein your insurer will provide a death benefit to your family members in case of your unexpected demise during the policy term. 
 

We have customised our TATA AIA term insurance plans to satisfy individual needs better. The death benefit can be received as a lump sum or regular income for a defined income period. You can also opt to receive the premiums paid towards the policy as a refund when the policy matures.
 

There is also the option to add-on rider# options that pay the insured sum during specific scenarios in your life, such as getting affected due to a critical illness, terminal illness or a disability.
 

 

What is a Health Insurance Plan?

A health insurance plan is a product that provides financial assistance to pay for your hospitalisation and medical expenses during an emergency or even otherwise. In addition, it can ensure cashless treatments in the network of hospitals tied up by your insurer. 
 

The plan can cover pre-hospitalisation, and post-hospitalisation costs up to the sum insured. You can purchase individual health insurance or family health insurance to include all your family members. 
 

 

Difference Between Term Insurance & Health Insurance

 


There are a few factors that state the difference between term insurance and health insurance plans. 
 

Factors

Term Insurance 

Health Insurance

Objective

A term insurance plan will provide a life cover that will offer the lump sum death benefit to your loved ones in case of your unexpected death. Your family can utilise it for various financial objectives such as paying off debts, accomplishing future financial commitments, etc.


A health plan is used to pay for your hospital bills and other related medical expenses based on your health conditions and other treatments. 


Benefits

With a term plan, you can receive a life cover, add-on rider# benefits, and the return of premiums2 on maturity. You can also customise the plan based on your financial needs.


With a health insurance plan, you will receive a financial benefit to manage your treatment expenses based on the bills charged by your doctor in the hospital. 


Taxation*

The premium amount paid towards your term plan will qualify for a tax* deduction under Section 80C upto ₹1,50,000, and the payouts will qualify for the tax* exemption under Section 10(10D) of the Income Tax Act 1961. 


The premium paid towards your health insurance plan will qualify for a tax* deduction under Section 80D of the Income Tax Act, 1961. The deduction can be upto ₹25000 for an individual and upto ₹50,000 for a senior citizen. 


Add-on Options

Apart from the life cover, you can choose additional riders# such as the critical illness rider# to pay the insured sum for your hospitalisation and other medical bills in case you get affected due to a critical illness during the policy term.


You can extend the health insurance benefits based on your family requirements by adding maternity cover, newborn cover, OPD cover, etc.



Maturity Benefit

There is no real maturity benefit in term insurance plans. However, you can choose to get the return of premium2 paid at the end of the policy term, which will serve as a savings benefit.



In a health insurance plan, you can receive a no claim bonus that will reduce the premium by a certain percentage if you have not filed a claim in the previous year.



Policy duration

You can choose a longer policy duration, up to 40 years, to leave a strong legacy of financial support for your loved ones. 

Regular health insurance plans have a 1-year policy tenure. 



 

At Tata AIA, we provide a flexible term insurance plan to customise it as per your needs. There are flexible premium payment and payout options. You can also increase the sum insured at different stages of your life. In addition, you can waive future premiums in case of a total and permanent disability while keeping the policy in effect.
 

With our online term policy, you can research the features online, understand the benefits, undergo the necessary processes and purchase the term plan online from the convenience of your house. 
 

 

Conclusion

Term insurance and health insurance are two different products that extend their financial support in an emergency. Term insurance plans provide a life cover, add-on riders#, and the return of premium2 options. A health insurance plan will provide a fund to pay for your medical bills and other hospitalisation charges. 
 

Understand the difference between health insurance and term insurance and make the right choice based on your financial requirements. And, if you are the sole earning member in the family, a term insurance plan with the necessary riders# will certainly be a complete solution for all your financial needs. However, you need to invest early and choose a longer policy term to maximise the benefits! 
 

L&C/Advt/2023/Apr/1165

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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 a guaranteed issuance plan, and it will be subject to Company’s underwriting and acceptance.

  • For more details on risk factors, terms and conditions please read 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 do 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 on 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.

  • 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