Health insurance or life insurance: which is more important?

Aditya works in the corporate sector. He is 30 years old and earns a decent salary. He plans to get married in a few months and wants to take out insurance for himself. However, he only has a small amount of money to spend and is confused about buying life insurance or a health insurance plan.

He discusses this matter with his uncle, who is a financial adviser. His uncle begins by explaining the difference between life insurance and health insurance.

The main reason why an individual buys a life insurance policy is to ensure that their dependents can maintain their lifestyle in the event of an eventuality. In the absence of the policyholder, the life insurance cover is paid to the beneficiaries. The goal is to purchase adequate life insurance coverage that can replace the insured’s income for at least a few years. This protects the insured’s assets for future generations while allowing dependents to maintain their lifestyle as much as possible, at least financially.

The purpose of a health insurance policy is different. There are no contingencies under a health insurance plan. Instead, a health insurance policy is supposed to pay for the cost of medical emergencies as they arise.

In today’s fast-paced environment, illnesses are on the rise. At the same time, the cost of medical treatment is also rising rapidly. A health insurance policy can help provide cashless hospitalization and treatment for several conditions mentioned in the policy. Alternatively, it could provide a lump sum to the policyholder to treat certain serious illnesses, as mentioned in the insurance policy.

Health insurance or life insurance: which is more important?

As you can see, health insurance and life insurance contracts occupy an important place in a portfolio. An individual can amass a lot of wealth, but it can quickly be lost by paying for medical care.

In the event of an eventuality, his wealth could be lost by paying the various financial liabilities of his dependents. Eventually, there may be nothing left for future generations unless a life insurance policy is in place to supplement dependents’ finances, if and when the worst happens.

At the age of Aditya, it is possible to obtain both life insurance and health insurance at an affordable rate. If he can’t afford two premiums, he can consider a comprehensive insurance plan that offers the benefits of a life insurance policy with critical illness coverage and accidental disability coverage.

HDFC life QuickProtect is a comprehensive insurance policy that covers death, disability and illness. The policy is issued without undergoing a medical examination (depending on the underwriting), making it a hassle-free option. The premium paid for the policy may be used to claim an income tax refund under the applicable section of the Income Tax Act.

A person can choose from three sum assured options, depending on their needs and price. The insurance plan provides lifetime protection in the event of a contingency. In addition, it pays a regular monthly income equal to 1% of the sum insured per month for up to 10 years in the event of an accident resulting in permanent disability or a lump sum payment in the event of accidental death. The policyholder also receives a lump sum payment when diagnosed with one of the 19 critical illnesses listed in the policy to cover the cost of treatment.

The essential

Regardless of age and stage of life, having all-risk insurance to cover loved ones and protect their income in the event of an accident or contingency is a must. While a term insurance plan provides a financial safety net for the family, health insurance can help ensure the well-being of the breadwinner by paying for their treatment. HDFC life QuickProtect adds another layer of security by including income protection in the event of an accident.

You can visit the HDFC Life website to learn more about this plan.

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