Term Insurance Vs. Life Insurance Vs. Health Insurance Plans

Be it term insurance, health insurance, term life insurance or life insurance, all plans act as a financial safeguard against unprecedented financial contingencies. Emergencies and difficulties may arise anytime, like a bolt from the blue. You need proper resources to handle such circumstances. Insurance policies offer the best answers to such situations. Here, we will present a comparative study of term plans, health plans, and life insurance policies.

Comparison of Term V/S Life V/S Health Insurance Plans

1. Term plans:

It comes with a fixed tenure. If the holder passes away during that tenure, the nominee receives the benefit from the company. It is also termed as Pure Protection Plan, signifying that it offers protective coverage to the family in the breadwinner’s absence. There is no claim if the holder survives the tenure. While buying online, online term plan comparison is an essential step.

2. Life insurance plans:

The holder receives maturity benefits upon completing the pre-fixed insurance tenure as promised, irrespective of the fact that the holder is alive or not. The holder decides the tenure and if he/she passes away by that time; the nominee receives the benefit.

3. Health insurance plan:

As the name suggests, it handles medical care and treatment costs. There is a provision to cover the medical costs of all the family members under a single plan.

  • Types of benefits offered
  • Term Insurance
  • Life Insurance
  • Health insurance
  • Coverage Offers coverage on the premature death of the policyholder within the insurance tenure.
  • Offers coverage only on the maturity of the plan.
  • Offers coverage to cover medical claims that arise within the course of the plan.
  • Duration Ranges between 10 years and 35/40 years
  • Ranges between 5 and 30 years.
  • Begins from 5 to 10 years.
  • Premium Cheapest among all sorts of policies with low and reasonable premiums.
  • Cheaper when bought young. Comparatively higher premium rate than term insurance plans.
  • Experience a heightened premium with the age of the buyer.
  • Death Benefits Only payable on the death of the holder within the course of the plan.
  • Always payable as promised, whether the policyholder lives or dies.
  • No death benefits are payable if the holder immediately dies with the recorded illness and with no hospitalization.

Common benefits of these plans:

1. Payment:

It varies between a single premium, regular premium at a particular interval or a partial premium, depending on the choice and requirement of the holder.

2. Purchase:

All the plans can be easily bought online. Always compare online term plan and other insurance plans to settle for the most suitable one.

3. Transferability:

All these policies are transferable with no extra fees or interest.

4. Tax exemption:

All three plans enjoy tax exemptions under the IT Act, up to a limited percentage. The premium paid for term and life insurance plans are exempt under section 80C unto INR 1.5 lakhs per annum, while premium paid towards health insurance plan is exempt under section 80D upto INR 25,000 per annum for self, spouse and dependent children and an additional amount of INR 25,000 for dependent parents.

The above discussion shows a clear picture of the importance of health plans, term plans, and life insurance. It is best to start investing in insurance early in life after careful research, to reap optimum benefits.

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