Buy Health Insurance Online

Exclusive

Wellness Benefits

24*7 Claims

Support

Tax Savings

u/s 80D

9000+ Cashless Hospitals PAN India

Pincode

+91 Enter Mobile Number

Try agian later

I agree to the Terms & Conditions

Port My Policy

Download Policy

(Incl 18% GST)

Difference Between Term Insurance and Health Insurance Explained

We know your family means everything to you. You want to see them happy and independent, both when you’re around and even after you’re gone. That’s why having insurance is not just an option; it’s a necessity.

With various types of insurance available, choosing the right one for your loved ones is crucial. Term insurance provides financial protection for your family after your demise, while health insurance safeguards you from unexpected medical expenses.

But which one should you choose? Which is better? What are the benefits? Read on to find answers to all your questions about the difference between term insurance and health insurance.

Team Digit

What is Health Insurance?
What is Term Insurance?
Term Insurance vs Health Insurance
Types and Benefits
Term or Health Insurance: Which is Better?
Frequently Asked Questions

What is Health Insurance?

In our fast-paced lives, we grow and we spend. The ever-growing standard of living means spending and bettering every day.

Most of our savings are limited to the first week of the month when our bank account shows our salary credit message. After paying the bills, what you are left with, is that enough for a rainy day? Sadly for most of us, the answer is no! 🙁

Health insurance is a type of general insurance that provides financial protection for you and your family when a health emergency arises.

What is Term Insurance?

Your family members are your world, you would do anything in your capacity to provide the best of the best to them. What happens to them after you are gone? Haunting but true.

You know you won't be there forever, but you can still take care of them… calming, isn’t it? 🙂 And the answer to your calm is Term insurance.

Term insurance provides your family with a death benefit in the event of your untimely death during the policy term is known as a life insurance term plan.

Your Term insurance will take care of your family’s financial needs even when you are not around. It is a life insurance plan that will give financial coverage to the beneficiary/nominee of the person insured.

Key Differences Between Term Insurance and Health Insurance

Imagine you’re building a safety net for life: One that shields you from unexpected health expenses and another that secures your family’s financial future if life takes an unforeseen turn.

Health insurance and term insurance are a part of insurance, yet they serve distinctly different purposes. Understanding the difference between these two pillars of financial planning can empower you to make smarter decisions.

Here are some basic differences between term insurance and health insurance:

Factors	Term Insurance	Health Insurance
Meaning	It is an insured person’s protection cover over his/her family; it secures the family financially if the insured is no more.	It secures you and the family members added in your medical/ health policy plan from unexpected medical expenditures.
Time-frame	Provides the nominee with a one-time fixed amount in case the insured is no more.	It is like an invisible hand, helping you through your financial needs during times of need, as and when required. There is no such specific time frame.
Premium Cost	The premium charged is usually very less.	The premium charged is a little high.
Premium Payouts	The premium pay-outs are mostly annual, the cost per month is usually under 500 INR for an approximate cover of one crore, the general practice is to pay annually as the final amount doesn't really hurt the pocket much.	The premium payouts are mostly monthly, though some insurance companies also offer quarterly, half-yearly, or yearly premium payouts.
Benefits	It does not come with policy maturity advantages; it’s a financial blanket for grieving family members after the insured's demise. If the insured survives after the policy's term, the term insurance policy is terminated.	It does come with a no-claim maturity bonus or a rollover of the unused amount in some cases resulting in lower premium pay-outs in the following year.
Add-Ons	Rider benefits include options like a premium waiver, accidental death benefit, critical sickness benefit, and permanent disability benefit.	Health insurance policies provide riders such as maternity benefits, worldwide treatment coverage, critical illness coverage and wellness initiatives.
Tax Benefit	Under Section 80C of the Income Tax Act of 1961, premiums paid for term insurance policies are deductible from taxes.	Section 80D of the Income Tax Act of 1961 allows for tax benefits on health insurance premiums.
Policy Duration	To provide your loved ones with a solid legacy of financial support, you can opt for a lengthier policy duration of up to 40 years.	The policy term for standard health insurance policies is one year.

Types of Health Insurance vs Term Insurance Policies

When it comes to securing your future and safeguarding against life’s uncertainties, both health insurance and term insurance play pivotal roles. Both insurance policies come in various types for specific requirements.

Let’s know the different types of health insurance and term insurance policies and their unique offerings.

Types of Health Insurance Policies

There are different types of health insurance policies that provide coverage to everyone. We know one health insurance is never fit for all, and hence, there are seven different types of health plans to provide you with the desired coverage.

Let us discuss each of these plans:

Individual Health Insurance: As the name suggests, this insurance covers a single person. Individuals above the age of 18 can purchase this plan. This policy suits individuals who are unmarried and young.
Family Floater Policy: The entire family, including the insured, is covered under a single plan and the premium is paid annually. In this plan, the sum insured is split among all the family members. Know more about health insurance plans for families.
Senior Citizens Health Insurance: This Policy is for your ageing parents. From the best hospital and service tie-ups to covering the common treatments required in old age, we give the best to our customers. Know more about senior citizen health insurance plans.
Group Health Insurance: This insurance is designed for a group of employees working together. Sometimes, this insurance provides coverage to the families of an employee. It comes with a low-cost premium.
Health Insurance with Maternity Coverage: Maternity coverage can be bought as a rider along with the basic health insurance plan. This plan covers all expenses incurred during the prenatal, delivery, and postnatal stages.
Critical Illness Insurance: This insurance covers expenses incurred due to any life-threatening disease such as cancer, paralysis, heart attack, etc.
Top-Up Health Insurance: This health insurance policy provides an additional sum insured in health insurance and it comes with a deductible clause.

Types of Term Insurance Policies

Did you know there are different types of term insurance policies as well? Term insurance comes in various types, each designed to cater to specific needs and life goals. Understanding the types of term insurance policies will help you make an informed choice:

Level Term Insurance Plan: During the entire term, the sum assured is unchanged and is paid to the family after the insured’s demise.
Premium Refund Term insurance - If the term ends and the insured survives, the premiums are refunded tax-free.
Increasing Term Insurance: The death benefit increases each year through the term of the plan. With the increase in the sum assured the premium increases too.
Decreasing Term Insurance: The sum assured decreases by a fixed percentage every passing year, the premiums remain the same, but the risk cover is reduced.
Convertible Term Plan: The insured can convert the term plan to an endowment assurance plan by paying a little extra premium.

Benefits of Health Insurance Plans and Term Insurance Plans

Understanding the benefits of a health insurance plan and a term insurance plan is crucial, as you will need these policies sooner or later in life. It is better to make a smart choice at the right time before it’s too late:

Benefits of Health Insurance Policy

Health insurance acts as a financial shield, covering medical expenses like hospitalization, treatments, surgeries and whatnot! Here are some of the major benefits of having a health insurance policy:

Restoration Benefit: It is a coverage in your health insurance, in which if your Sum Insured gets exhausted towards treating a disease, the insurance company restores it.
Critical Illness Cover: This coverage, available as an add-on or part of the plan, covers hospital expenses in case of critical illness.
Daily Hospital Cash Cover: This cover helps you manage the expenses beyond the hospital bill in case of any medical emergency.
Maternity Benefit: This benefit, if opted for, covers hospitalization and all related expenses when a mother-to-be is admitted for delivery. It also covers any treatment required in case of complications.
Home (Domiciliary) Hospitalization: If any of your parent or any family members need care at home in a condition which might have required hospitalization, then this benefit is for you.
Pre and Post-hospitalization Expenses: Certain expenses, like X-rays, scans, and medicines, are usually not covered. However, health insurance protects your financial expenses incurred before and after hospitalization.
Accidental Hospitalization: This benefit covers costs of Ambulance, Daycare procedures, Pre-hospitalization and Post-hospitalization expenses that include ICU, Medication, OT, Physician Fees, Diagnostics and more in case of an accident.

We at Digit believe in providing the best add-ons and benefits to our customers so that they can make the most of their policies.

Also Read:

Benefits of Term Insurance Plans

Term insurance provides financial security to your family in case of your untimely demise. Not only this, it offers a high coverage amount at an affordable premium, ensuring your loved ones can maintain their lifestyle, pay off debts, or meet future goals. Here are some of the benefits of getting a term insurance policy.

This is mainly your financial support to your family when you are absent from their lives.
The premium charged is usually less and stays constant depending on the type of policy you have chosen.
With term insurance comes tax benefits under section 80C of income tax. However, Tax savings should not be the reason for buying a term policy. This policy offers tax benefits and exemptions as per prevailing tax laws.
You can include a rider benefit in your term insurance policy to increase its coverage. For this reason, the insurance companies give a range of riders.
When one of the covered critical illnesses in your policy is diagnosed, you will get a lump sum payment if you have a critical illness rider added to your term insurance policy.
The 'Return of Premium' option on a term insurance policy lets you get your premiums back if you outlast the policy's term.

Term Insurance vs Health Insurance: Which is Better?

You will eventually realize the necessity of both health and term insurance if you evaluate their benefits. Even if they have different functions in terms of offering financial assistance in various situations, you should consider choosing both of them rather than just one to give your family and yourself complete financial security. Therefore, making an informed choice early on before it is too late is preferable.

While both serve critical purposes in life, they cater to entirely different needs. Here are certain factors by which you can decide:

Deciding on the terms of your and your family's needs.
Prioritise and distribute your age to buy health insurance at a young age and term insurance if you start your family.
Plan to purchase a plan based on your financial budget. Decide on the premiums and sum insured; it will be better to begin with something.

Ideally, you should have both health insurance and term insurance to ensure comprehensive financial protection. Start by evaluating your current financial situation, liabilities, and family needs to strike the right balance.

Be smart and plan things before it’s too late.

FAQs about Term Insurance vs Health Insurance

All

Health Insurance vs Term Insurance: Which to Select?

Since term and health insurance serve different functions, they are not inherently superior to one another. In the event that you pass away too soon, term insurance gives your family financial stability. Conversely, health insurance helps you prevent financial strain in the event of a medical emergency by covering medical costs. Thus, each is significant in its own right.

Can we get both health and term insurance?

Yes, you can get both together! Health insurance will cover health-related expenses, and term insurance will safeguard your family after your demise. They work together to safeguard your financial security.

Do I require life and health insurance?

Yes, having life and health insurance is essential for total financial security. While life insurance, particularly term insurance, protects your family's financial future in the event of your death, health insurance protects you against unforeseen medical costs.

Why is Life Insurance Necessary After Retirement?

Life insurance is important after retirement because:

Insurance may not be required if you are financially secure after retirement and your kids are self-sufficient.
However, you might want to consider life insurance if you still have large bills, like a mortgage, or dependents, like spouses or kids.
Additionally, using life insurance inside an irrevocable trust could be a good way to lower estate taxes if a person has significant assets that could result in them.

Why is health insurance necessary for young people?

Health insurance is necessary for young people because it provides coverage in major and unexpected situations, even for young and generally healthy people. Anyone can have a major sickness or accident, and even a quick trip to the ER or outpatient surgery can cost a lot of money.

Without health insurance, people would be responsible for paying for all of these costs. Although it is less frequent, emergency rooms and healthcare practitioners may decline to help people without insurance.

What distinguishes a health insurance policy from a term insurance policy?

A health insurance policy pays for hospitalization costs in return for a premium, but a term insurance plan guarantees a certain amount to the policyholder's designated family members in the event of their death.

What types of deaths are excluded from the life insurance policy?

Term insurance coverage is mostly determined by the cause of death. Generally speaking, deaths brought on by natural disasters like earthquakes or floods or terrorist attacks are not covered.

On the other hand, accidental death can be covered by a rider in the term plan. Furthermore, certain types of terminal illnesses and unreported pre-existing conditions are not covered. You have to check with your insurance provider to know the cause of deaths that are excluded.

Can a life insurance coverage be cancelled at any time?

Yes, you can terminate your life insurance coverage whenever you choose, usually with 30 days' notice. To stop your coverage, just notify your insurer and adhere to their instructions.

What occurs when a plan for term insurance expires?

If a term insurance plan of the Return of Premium type is selected, the maturity benefit will be paid after the policy period. Under this plan, the policyholder will receive a refund of their premium.

Is it permitted to purchase more than one health insurance plan?

Yes, it is acceptable to obtain financial stability by obtaining several health insurance policies. It is typically advised to get a variety of health insurance plans, such as individual health insurance plans, critical illness coverage, and family-floater plans.

Does Digit Insurance provide a term insurance plan?

Yes, Digit provides a term insurance plan as well. You can visit their website and click on Life Insurance Plan to learn more about the plans or you can raise a query to discuss the plan with an insurance provider.

More articles related to Health Insurance

Domiciliary Hospitalization Cover

Group COVID Insurance for SME's Industries & Companies | Digit

Health Insurance Tax Benefits for Senior Citizens

Mental Health Insurance

Air Ambulance Cover in Health Insurance

Benefits of Critical Illness Cover

Health Insurance Glossary India: Terminology, Terms and Definitions

Senior Citizen Health Insurance

GMC and GPA in Health Insurance Policy

Coinsurance vs Copay vs Deductible

Myths about Health Insurance

Increase of Health Insurance Premium on Renewal

What is ABHA Card

What is Health Insurance?

Super Top-up Health Insurance for Corporate Employees - Check Prices

Difference between Mediclaim and Health Insurance

Copay in Health Insurance

Pre & Post Hospitalization Expenses in Health Insurance

Health Insurance with Cancer Cover

Health Insurance for Vector Borne Diseases & COVID-19 Online

Life Insurance vs Health Insurance

Health Insurance for Vector Borne Diseases & COVID-19 Online

Indemnity Health Insurance

Health Insurance Plans for Family

Cooling-off Period in Health Insurance

Add-Ons in Health Insurance Policy

Consumables Cover in Health Insurance

Waiting Period vs Survival Period in Health Insurance

TPA in Health Insurance

Types of Health Insurance Plans

Health Insurance for Parents

Reimbursement Claims in Health Insurance

What to do if you are tested Positive for COVID-19?

Health Insurance Non-Medical Expenses

Critical Illness Health Insurance Cover

Grace Period in Health Insurance

Waiting Period in Health Insurance

Road Ambulance Health Insurance

Nominee in Health Insurance

Health Tips & Guides

Anywhere Cashless Hospitals - Hassle Free Hospitalization Anywhere in India

Day Care Treatment in Health Insurance

Health Insurance Premium Calculator

Health Insurance for Disabled Person

Yoga Asanas & Exercises for Better Lifestyle

Is Dental Covered in Health Insurance?

Zone Based Health Insurance in India

Health Insurance for Government Employees

Health Insurance for Smokers

Restoration Benefit in Health Insurance

Check Health Claim Status Online Instantly

Comprehensive Health Insurance

Compare Health Insurance

Coronavirus Cover: Health Insurance for Coronavirus Treatment

Healthy Lifestyle

Health Insurance for Self Employed/Freelancer

Types of Health Insurance Claims

Benefits of Health Insurance

Reason to Buy Seperate Health Insurance for Parents

Daily Hospital Cash Benefit in Health Insurance

Health Insurance on EMI

Health Insurance for Mother

PED in Health Insurance

Cashless Health Insurance

How to Port Health Insurance?

Health Insurance Tips

Moratorium Underwriting vs Full Medical Underwriting

Government Insurance Schemes

Loading in Health Insurance

AYUSH Health Insurance Benefits

Health Insurance Tax Benefits

Super Top-up Health Insurance for Employees Retiring Soon

Personal Accident Insurance

Super Top-up Health Insurance for Senior Citizens in India - Check Prices

Sum Insured in Health Insurance

What is Long-term Health Insurance? Features & Benefits Explained

Individual Health Insurance

Term Insurance vs Health Insurance

Health Insurance for Diabetes Patients

Corona Kavach Policy: Buy COVID Kavach Health Insurance Online

File Health Claims Online on Digit App

Health Insurance After Retirement

Organ Transplant Cover in Health Insurance

List of Excluded Hospitals

Family Floater vs Individual Health Insurance

How to Choose the Right Sum Insured in Health Insurance?

Room Rent Capping in Health Insurance

How to Reduce your Health Insurance Premium?

Check Digit Health Insurance Claims Status on Digit App

Family Floater Health Insurance

Cumulative Bonus in Health Insurance

Download your Health e-Card

Wellness Benefits with Digit Health Insurance

City

Inpatient vs Outpatient Hospitalisation

Health Insurance with Free Medical Check Up

Deductible in Health Insurance

List of Excluded Hospitals

Maternity Health Insurance

Indemnity Based vs Fixed Benefits Health Insurance

Maternity Coverage with No Waiting Period

GHC

Health Insurance Bariatric Surgery Cover

Super Top up Health Insurance

Cataract Health Insurance

Best Health Insurance Policy

Corona Rakshak Policy Online: Health Insurance for COVID-19 in India

Arogya Sanjeevani Policy

Health Insurance OPD Cover

Coronavirus Health Insurance: COVID-19 Insurance Policy in India

Government Health Insurance Scheme

Health Insurance for NRI Parents

Exclusions in Health Insurance

Sub Limit in Health Insurance

Health Insurance for Disabled & HIV/AIDS Patients: Check Coverage and Benefits

Terminal Illness vs Critical Illness

Health Insurance Plan that Covers Infertility Treatments

Health Insurance Options for Retirees

Check Pending Challan only on Digit App

Install

Check Pending Challan only on Digit App

Latest News

Currently there are no news to show.

Renew & Download Policy Document, Check Challan, Credit Score, PUC & more

51K+ Reviews

4.8

Rated App

51K+ Reviews

10K+ Reviews

4.3

Rated App

10K+ Reviews

Download the App

CIN: U66010PN2016PLC167410, IRDAI Reg. No. 158.

Go Digit General Insurance Limited (formerly known as Oben General Insurance Ltd.) - Registered Office Address - 1 to 6 floors, Ananta One (AR One), Pride Hotel Lane, Narveer Tanaji Wadi, City Survey No.1579, Shivaji Nagar, Pune-411005, Maharashtra | Corporate Office Address - Atlantis, 95, 4th B Cross Road, Koramangala Industrial Layout, 5th Block, Bengaluru-560095, Karnataka | Trade logo of Go Digit General Insurance Ltd. displayed above belongs to Go Digit lnfoworks Services Private Limited and is provided and used by Go Digit General Insurance Ltd. under license.

Difference Between Term Insurance and Health Insurance Explained

Table of Contents

What is Health Insurance?

What is Term Insurance?

Key Differences Between Term Insurance and Health Insurance

Types of Health Insurance vs Term Insurance Policies

Types of Health Insurance Policies

Types of Term Insurance Policies

Benefits of Health Insurance Plans and Term Insurance Plans

Benefits of Health Insurance Policy

Benefits of Term Insurance Plans

Term Insurance vs Health Insurance: Which is Better?

FAQs about Term Insurance vs Health Insurance

Health Insurance vs Term Insurance: Which to Select?

Can we get both health and term insurance?

Do I require life and health insurance?

Why is Life Insurance Necessary After Retirement?

Why is health insurance necessary for young people?

What distinguishes a health insurance policy from a term insurance policy?

What types of deaths are excluded from the life insurance policy?

Can a life insurance coverage be cancelled at any time?

What occurs when a plan for term insurance expires?

Is it permitted to purchase more than one health insurance plan?

Does Digit Insurance provide a term insurance plan?

Latest News