Health Insurance vs Term Insurance: Know The Difference

We understand that your family is valuable to you. Therefore, you want to see them happy and self-sufficient no matter where you are.

Most people believe that term insurance is a panic solution for overly emotional people. This isn’t true. If you can spare the annual premium sum and purchase yourself some peace of mind knowing your family will be cared for always, then why not?

The same goes for health insurance too!

If you are concerned about your family’s well-being and are aware that illnesses do not seek permission, you will most likely buy health insurance for yourself and your family at a low rate to keep those mounting medical expenditures at bay.

Think ahead and make plans before it’s too late. So, we’re here to help you understand each of these policies so you can choose which one is best for you.

What Is Health Insurance?

We evolve and invest in our fast-paced lives, and the ever-increasing standard of life implies spending and improving our lifestyle every day.

The majority of our savings last till the first week of the month when our bank statement displays a notification indicating that our salary has been credited. After you’ve paid the bills, are your savings sufficient for a rainy day? Unfortunately for the majority of us, the answer is no.

The most terrifying aspect of this is the unanticipated, unwelcome medical bills. Better hospitals mean hefty bills. This is where a health insurance policy comes to your rescue.

When the policyholder or the people added to their health insurance get unwell or undergo surgery, a health insurance covers all of their medical expenses. Basically, their life is put back together.

What Is Term Insurance?

Your family is your entire world, and you would do all in your power to provide them with the best of everything. 

You know you won’t be there forever, but you can still look after them… Isn’t it comforting? Term insurance is the solution to your peace of mind.

Even if you are not present, your term insurance will cover your family’s financial needs. It is a type of insurance that provides financial protection to the individual insured’s beneficiaries or nominees.

Difference Between Health Insurance and Term Insurance

Take a look at the table below to get a deeper insight on the difference between health insurance and term insurance:

Term InsuranceHealth Insurance
It is a financial safety net for an insured person’s family in the event that the insured passes away.It protects the insured and their family members who have been added to their medical/health insurance plan from unforeseen medical expenses.
Provides a predetermined one-time payment to the nominee if the insured is no longer present.It’s like an invisible hand guiding you through your financial needs as and when they arise; there’s no set time limit.
In most cases, the premium is extremely low.The premium is a little on the high side.
Premiums are normally paid out once a year, and the monthly cost is pretty affordable. The standard approach is to pay once a year because the total cost isn’t very high.The premium pay-outs are usually paid out on a monthly basis, however some insurance firms also offer a quarterly, half-yearly or yearly premium payout as well.
It does not offer policy maturity benefits; rather, it serves as a financial cushion for bereaved family members. The term insurance policy is cancelled if the insured survives after the policy’s term has expired.It does, however, offer a no-claim maturity incentive or, in some situations, a rollover of the leftover amount, ending up in lesser premium payouts the coming year.

Types of Health Insurance Policies

Let’s have a look at the major types of health insurance policies:

  • Individual Health Insurance – As the name implies, it only provides cover to one person. So as a policy holder, only you can avail the benefits of the individual health insurance. 
  • Group Health Insurance – A group of people, usually employees or members of an organization, is covered in a group health insurance plan provided by an employer. 
  • Family Floater Insurance – A single plan covers the entire family as well as the policyholder, and you can pay the premiums on a yearly basis.
  • Unit-linked Health Insurance – This plan is basically a combination of insurance + investment. Under the umbrella of a unit-linked insurance plan, insurance companies provide both health insurance coverage and investment. One part of the premium provides an insurance cover while the insurance companies use the rest for investment. In this plan, the policyholders can pay their premiums on a monthly or annual basis.  

Types Of Term Insurance Policies

Let’s have a look at the major types of term insurance policies:

  • Level Term Insurance Plan – The sum assured remains constant throughout the term and is given to the policyholder’s family following his or her demise.
  • Premium Refund Term Insurance – If the insured survives the period, the insurance company repays the premiums tax-free.
  • Increasing Term Insurance – The benefits grow every year during the plan’s tenure. The premium rises in line with the rise in the sum assured.
  • Decreasing Term Insurance – Annually, the sum drops by a certain percentage, the premiums remain unchanged, but the risk cover is impacted/reduced.
  • Convertible Term Plan – The insured can change the plan to an endowment assurance plan by paying a small additional premium.
  • Term Plan with Riders – The insured chooses additional coverage and perks in addition to the sum promised, which solidifies his or her basic term insurance.

Term Insurance Vs Health Insurance: Which One Is Better?

To figure out which kind of insurance plan is best, we must first consider the benefits of both:

Benefits Of Health Insurance:

Some of the benefits of buying health insurance:

  • Buying health insurance can provide you coverage on pre and post hospitalization charges up to the limit of amount insured. 
  • Some health insurance policies provide maternal benefits which includes coverage for all delivery and new-born expenses. 
  • Several health insurance plans offer benefits for home care(domiciliary treatment) as well. 
  • There are many expenses which we do not usually include in major hospitalization processes like X-rays, scans, medicines. Buying health insurance can provide you coverage for all of these.
  • If you choose a critical illness cover as a part of your health insurance plan, it covers your hospital expenses in critical emergencies as well. 

Benefits Of Term Insurance:

Some of the major benefits of buying term insurance: 

  • A term insurance policy can offer you a better sum insured at a cost-effective premium.
  • Buying a term insurance plan comes with income tax benefits. 
  • It can act as a financial cushion for your family members when you’re no longer present.
  • You can add various rider benefits to your existing term insurance plans as and when required. 
  • Some term life insurance plans also provide accidental death benefit covers. 

Both the insurance plans have their own benefits. However, one must choose the one that best suits their requirements. Therefore, it is always advisable to take financial advice before investing in such options or plans. 

What We Offer?

Let’s take a look at some of our amazing offerings:

Benefits Of Our Health Insurance Plans

Zimyo’s Health Insurance plans allow you to offer health security to your employees to be ready for every stage of their life and live stress-free!

  • For any condition, including PED (Pre-existing diseases), there is no waiting period.
  • No medical check-up.
  • Cashless across India at TAT of approx. 2 hours.
  • Best claim settlement ratio across the industry.

We ensure that the best medical treatment is available for you and the people you value in your life. You don’t have to worry about the hospital bills if you have coverage under our Group health insurance or retail health insurance plans. 

Benefits Of Our Term Insurance Plans

It is a good idea to opt for an adequate Health insurance policy at all times. However, it is also a good idea to consider buying term Insurance. Term Insurance plans provide a blanket of financial safety to the families of your valued employees. 

The payout of this plan can help them financially survive on their own, and they don’t have to worry about sacrificing education or working extra hours to make more money for survival.

Zimyo Term Insurance plan allows you to offer security to the families of your valued employees. This way, they can live their life comfortably and

  • No Medical Checkup
  • More than 20% Discount On Premium Pay
  • A Hassle-free Digital Buying Journey
  • No Extra Documentation

The aim is to provide life cover benefits to employees with the best-in-class products with uncomplicated applications in the digital realm.

Wrapping Up

There are numerous add-ons and benefits available with health insurance and term insurance policies. However, it is crucial to look out for your people with only the best. We at Zimyo believe in giving our customers the finest experience and employee benefits possible. So, all of our users can get the most out of their insurance cover.

In conclusion, if you truly understand the advantages of both, you will realize that we all require both policies at some point in the future. Therefore, it is preferable to make a wise decision at the right time before it is too late.

More from Zimyo:

Importance Of Employee Benefits For Remote Workers

6 Tips For Motivating Employees Under Adverse Conditions

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Zimyo Editorial Team

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