Is Health Insurance Enough? Why You Still Need the Best Term Insurance Plan

Health Insurance vs. Term Insurance: Understanding the Real Difference

Selecting an insurance plan involves balancing your life goals and knowing your financial obligations. Though Health Insurance is important to cover medical bills, it may be insufficient for your family’s economic stability. At the same time, choosing the right insurance plan is essential. Understanding the need for the right Term Insurance Plan enables you to make an informed decision for your family’s future well-being.

Understanding the Scope of Health Insurance

Health insurance plays an important role in paying the hospitalisation bills, procedures, surgery, and any other type of healthcare expenses. It saves you from spending all your money during the duration while addressing medical needs. It provides coverage for emergency medical needs, not for other expenditures.

Health insurance covers:

• The cost of hospitalisation and treatment.
• Pre and post-hospitalisation charges.
• Daycare procedures and some critical diseases.

It does not cover:

• Dependants’ everyday living expenses.
• Children’s school fees.
• Repayment of loans.
• Wealth accumulation and long-term savings.

Understanding these differences is important for better financial planning.

Importance of Term Insurance

If you are the only earning member, your family is supported by your income for day-to-day and future requirements. This is where the Best Term Insurance Plan becomes important. A term insurance plan provides financial security for your family by ensuring that they receive a lump sum amount that can pay for:

• Household expenses
• Child’s education and wedding
• Pending loans
• Retirement corpus for the spouse

Financial assistance in this form provides a sense of security and stability.

The Role of the Best Term Insurance Plan

A Best Term Insurance Plan acts as a financial safety net. Its affordability allows individuals to secure substantial coverage at relatively low premiums. Here are the benefits that make it an essential addition to your portfolio:

• High Coverage at Low Premiums: Term insurance provides significant coverage that ensures your family’s financial stability.
• Fixed Premiums: Once locked, your premium remains unchanged throughout the policy term.
• Flexibility: Plans have add-on options, like added coverage, joint life cover, and critical illness riders.
• Tax Benefits: Premiums are tax-deductible under Section 80C (applicable only under the old tax regime), and death benefits are largely exempt from tax under Section 10(10D) of the Income Tax Act.

With the Best Term Insurance Plan, you enable your family to continue their lifestyle even after your demise.

Combining Health Insurance and Term Insurance Plan

Health insurance and Term Insurance serve distinct but complementary purposes. Health insurance provides cover against health emergencies, and term insurance provides financial security to your dear ones. They collectively provide a good financial cover.

Compare Costs and Understand Charges

While health insurance has co-payments, room rent limits, and waiting periods, term insurance is typically simple. But it is still important to:

• Compare premium prices for various coverage.
• Compare riders and extra benefits provided.
• Know policy details and claims procedure.
• An educated comparison allows you to choose a plan with the best deal.

Consider Flexibility and Additional Features

The Best Term Insurance Plan usually has features like:

• Critical Illness Riders: Provide a lump sum payment on diagnosis of listed illnesses.
• Waiver of Premium: Premiums are waived in the event of disability or critical illness.
• Accidental Death Benefit: Additional payment in the event of death from an accident.
• Income Options: Your family can get regular income instead of a lump sum to take care of monthly needs.

These characteristics render term insurance policies versatile to developing life situations.

Evaluate Tax Implications

Both Term insurance and Health Insurance have tax benefits. Premiums paid towards health insurance are eligible for deduction under Section 80. Whereas, premiums paid for term insurance are covered under Section 80C (applicable only under the old tax regime). Term insurance death benefits are generally exempt from tax under Section 10(10D), providing relief to the beneficiaries.

Stay Updated and Review Regularly

Financial planning is an ongoing process. Your financial needs will change with your life stage, along with your insurance needs. Starting a family, changing jobs, or purchasing a property may require re-examining your insurance cover. Therefore, it is advised to use financial calculators for a regular reassessment of your insurance needs.

Other Considerations When Choosing the Best Term Insurance Plan

When choosing the Best Term Insurance Plan, always take into account:

• The Claim Settlement Ratio of the insurer. For instance, reliable insurers like Axis Max Life Insurance boast a CSR of 99.70%, which speaks volumes about reliability.
• The customer service experience and reputation of the insurer.
• The simplicity of handling the policy online.
• Clear claim procedures to enable hassle-free settlement for your loved ones.

Read More: National One Cent Day: Celebrating the Legacy of America’s Smallest Coin

Conclusion

Medical bills are covered through Health Insurance, which is crucial. The Term Insurance Plan fills in the gaps and provides your family with the financial support they need to keep their lifestyle intact, meet their financial goals, and face adversities.

Among the available choices, insurance companies like Axis Max Life Insurance provide extensive term insurance policies catering to different needs with flexibility and additional coverages. Their high claim settlement ratio adds to the confidence in their products as well. By covering both Health Insurance and Term Insurance, you establish a complete safety net that safeguards your financial future for your family.

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