Why do you need both health insurance and term insurance plans?

Complete financial protection is more important than ever in today's unpredictable times. While health and term insurance plans serve different functions, both are necessary for a comprehensive financial plan. Health insurance covers medical expenditures, whereas term insurance protects your family financially if you die unexpectedly. Understanding the value of both term insurance plans and term insurance with premium returns might help you make more educated judgements. Let's look at why having both health and term insurance coverage is essential.

Why you need both health insurance and term insurance plans

• Comprehensive financial protection

When combined, health insurance and term insurance provide complete financial security. Medical insurance pays for your medical bills, while term insurance pays a lump sum to your family. This second coverage is very important because it covers all aspects of financial risks that may affect you and your family.

• Coverage for medical expenses

Medical insurance covers hospitalisation, surgery, and other related expenses. These costs can be very expensive and if you do not have health insurance, they will use up all your money within no time. Health insurance means that you can get the right medical attention you need without having to worry about the costs involved.

• Financial security for your family

A term insurance plan pays a fixed amount to your family in the unfortunate event of your demise. It aids your family to sustain their standard of living, repay loans and achieve other financial needs in the future. It makes sure that your loved ones are not left stranded in terms of cash when they are already struggling.

• Tax benefits

Both health insurance and term insurance are eligible for tax deductions under the Income Tax Act in India. Premiums paid towards health insurance are allowed as deductions under section 80D while premiums paid towards term insurance are allowed as deductions under section 80C. Also, the amount received as the death benefit in a term insurance plan is tax-free as per Section 10(10D).

• Mental peace

It is reassuring to know that you have both health and term insurance. It allows you to concentrate on your life and career without having to worry about medical complications or the financial stability of your family. This allows you to lead a stress-free life and know that you are well-secured.

• Protection against rising medical costs

The costs of medical care are increasing at a fast pace in India. This is where health insurance comes in handy as it assists you in preparing for these increasing costs by bearing most of the costs. This means that one can get the right health care services without straining his or her pockets.

• Cover for critical illnesses

Most of the health insurance policies include benefits for critical illnesses like cancer, heart attack and stroke. Likewise, term insurance plans can have riders for critical illness. This double safeguard means that you are guaranteed financial assistance in the event of a serious illness, including the cost of treatment and rehabilitation.

• Long-term financial planning

Term insurance is an essential part of any long-term financial planning strategy. This guarantees that your family’s financial needs, for instance, children’s education and marriage are met even in your absence. When taken together with health insurance, it means that medical exigencies do not upset your financial planning.

• No financial burden on dependents

Lack of health insurance means your dependents will have to spend their money on medical bills. Likewise, if there is no term insurance, your family may be financially unstable in the event of your death. It is crucial to have both types of insurance to ensure that the dependents are not financially crippled so that they can attend to their needs.

• Access to better healthcare

Health insurance offers an opportunity to turn to specific hospitals and healthcare facilities. This makes certain that you get timely and quality medical care. Lack of health insurance means that one may be forced to settle for a substandard hospital because of the costs involved.

• Affordable premiums

While both health and term insurance plans have low premiums, they are even cheaper when taken at a young age. This makes it easier to integrate both types of insurance into an individual’s financial plan. A reasonable premium means that you get adequate cover without having to pay through your nose for it.

• Customisable coverage

Both health and term insurance plans offer customisation options. You can choose add-ons and riders to enhance your coverage based on your specific needs. Customisable coverage ensures that you receive tailored protection, addressing your unique financial and health risks.

• Employer health benefits may not be enough

Depending solely on employer-sponsored health insurance may not be adequate. Health insurance offered by employers may be restricted in some ways and may not cater for all medical costs. It is also important to have an individual health insurance plan so that one is fully covered even when one is not in a job.

• Term insurance with return of premium

Term insurance with return of premium has the advantage of paying the premiums back if the insured survives the policy period. This feature is a combination of the features of the term insurance plan and the savings aspect. It guarantees that you get some monetary value in return, making the investment in the policy worthwhile.

Ending note

For complete financial security, both health insurance and term insurance coverage are required. Health insurance covers medical expenditures, whereas term insurance protects your family financially if you die unexpectedly. Together, they provide peace of mind, tax breaks, and protection from growing medical expenditures. Whether it's term insurance with a return of premium or a basic health plan, having both forms of coverage can help you confidently manage life's uncertainties. By combining both health and term insurance into your financial plan, you can protect your family's future and live a stress-free life.