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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
