Learning the Difference Between Life and Health Insurance

Learning the Difference Between Life and Health Insurance

When it comes time to make decisions on the insurance coverage you want for you and your family, you may not always be sure what is covered by various insurance policies. Consider life and health insurance. Many believe health insurance should take care of any health issues you have. At the same time, many also believe something called life insurance should take care of any life-related issues you have, such as an illness. This is not the case. 

Differentiating Between Life and Health Insurance 

The first thing you need to understand is the difference between life and health insurance. 

Life insurance refers to what happens if your life has ended. This is an insurance that will give money to a beneficiary when you die. Health insurance, on the other hand, relates to taking care of you while you are living, and is meant to cover health concerns and maintenance, such as doctors visits, and any medical procedures you may need. 

Looking deeper into these insurance plans, it is important to know there is more than one kind of each of these insurances. In life insurance, there is whole life insurance and term life insurance. 

Whole life insurance is a policy you will only buy once and know it will be there for your family once you die. This type of policy has the higher premium but is meant to be a policy you can purchase when you are 20 and still have in place if you don't die until you turn 97. 

Term life insurance, on the other hand, is only in place for a set number of years. There is a little bit of a gamble to this type of policy, as it only covers a set time frame. If you don't happen to die within that time frame, the policy ends and there are no benefits for your beneficiaries if you die after that point. Term life insurance does have a lower premium since there is a chance you will not be able to cash it in, if you outlive the policy. 

Health insurance also has a number of varieties, from HMOs to PPOs and fee for service plans. Each of these come with varying costs and you will choose a health insurance plan factoring the amount of money you have per month to spend on a policy, and the kind of coverage that will be most beneficial to your medial needs.

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