Health Insurance vs Term Insurance

Health Insurance vs Term Insurance: Which is Best in 2024?

We have huge difference amng the health insurance companies. In this article we will show you a core comparison on Health Insurance vs Term Insurance.

Every one of us wants to secure the future of our family members and loved ones. You do not know when to face extreme medical conditions that might lead to your death. What will happen when you are not around them? Who will take care of them? What will happen when you meet an accident and get hospitalized? Will you be able to bear all the medical expenses on your own?

The fact is, not everyone can bear the huge expenses of the hospitals. Critical diseases like cancer or cardiac illness can incur a large number of medical charges. In such a case, you need to have a health insurance policy. Again, in case of your demise, someone has to look after your family’s financial needs. For that reason, you need to have term insurance.

Health Insurance vs. Term Insurance

Now let’s see what health insurance and term insurance are:

Health Insurance

A health insurance policy provides coverage for all hospitalization expenses. It ranges from the costs of pre-hospitalization to post-hospitalization. It is a comprehensive insurance policy that safeguards you from uncertain medical expenses.

Benefits of Health Insurance

The following are some of the benefits of a health insurance plan:

  • Safeguards you from medical expenses
  • Restoration benefit when the sum insured is over while treating an ailment
  • Coverage for critical illness, such as cardiac diseases, cancer, kidney failure, etc.
  • Assistance in managing expenses beyond hospital charges
  • Maternity benefits
  • Domiciliary hospitalization
  • Coverage for pre and post-hospitalization expenses
  • Accidental hospitalization

Term Insurance

Term insurance assures you a financial safeguard for your loved ones. Life insurance guarantees a death benefit in case of any unfortunate event leading to the death of the insurer. The policyholder pays a fixed premium at certain intervals to ensure financial coverage to the beneficiary/nominee.

Benefits of Term Insurance

Some of the benefits of a term insurance plan are as follows:

  • Provides financial support to your family in your absence
  • The Premium amount is usually low
  • Offers tax benefits and exemptions by the tax laws
  • Low premiums but high life coverage

Now let’s look at the differences between a health and term insurance plan.

Difference between Health Insurance and Term Insurance

Health Insurance

Term Insurance

It provides coverage for unexpected medical expenses for you and your family members.It offers financial assistance to your family after your demise.
It helps you with financial support throughout your medical emergencies.It provides the nominee with a one-time fixed amount when the policyholder is no more.
The premium amount is usually high.The premium amount is usually significantly less.
The premium pay-outs are generally annual.The premium pay-outs are generally monthly, although some insurance companies also offer quarterly, half-yearly, and yearly pay-out.
The duration of a health insurance plan starts from 5 to 10 years.The duration of a term insurance plan starts from 10 to 30/45 years.
The beneficiary/nominee will only get the death benefit after the insured’s demise.There will be no death benefit if the insured dies instantly with the ailment or without hospitalization.
A health insurance plan offers tax exemption benefits under section 80C of up to 1.5 lakh.The policyholder will get tax-exemption benefits under Section 80D of the Income Tax Act, 1961.


Health insurance and term insurance are the two most crucial insurance plans. The first one covers your medical expenses, while the latter supports your family financially when you are not around. You have to decide to choose between the two. However, it will be the best option if you can opt for both health and term insurance at the same time.

Frequently Asked Questions

  • What are the topmost term insurance plans in India?

Here are some of the best term insurance policies in India –

  1. LIC Tech Term (LIC of India) – the sum assured of Rs.50 lakhs
  2. ICICI Prudential iProtect Smart Term Plan (ICICI Prudential Life) – the sum assured of Rs.50 lakhs
  3. SBI Life eShield (SBI Life) – the sum assured of Rs.35 lakhs
  4. HDFC Click 2 Protect 3D Plus Term Plan (HDFC Life) – sum assured of Rs.10,000
  5. Max Life Online Term Plan Plus (Max Life) – the sum assured of Rs.25 lakhs
  6. Kotak e-term (Kotak Mahindra) – the sum assured of Rs.25 lakhs
  • What happens to term insurance if you don’t die?

If you do not die by the end of your term insurance policy, the funds will be forfeited. Which means you will not get any amount from your insurance company. In such a case, your premiums will support the pay-outs of that insurance company. They will pay those who have a term insurance policy with their company and died.

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