The Differences Between Health Insurance and Life Insurance
The differences between health insurance and life insurance are this; they have almost nothing in common.
Health insurance offers coverage for you, your family, or both if someone gets sick, or has an accident. Health insurance pays the doctors, hospitals and nurses for your incurred medical expenses. (after you meet your deductible and co-payments)
Life insurance pays a lump some amount to a beneficiary when the insured person dies. That’s it! It won’t pay the doctor bills, hospital or anything else. It just pays the beneficiary/s if the insured person dies.
Presently there are many options with life insurance such as “return of premium” riders and such. But the basic approach does the same thing. Pay a death benefit.
Where this all gets really confusing is when you combine the two policies. Often a health insurance company will package a health plan with a small life insurance strategy.
Honestly, this is nothing more than a ploy for health insurance for China the insurance company to jack up the overall premium on the strategy and make a bit more money. It’s an add-on if you will. And actually no, not all health insurance plans include life insurance.
But make no mistake about it; life-insurance is not the same thing as the health insurance.
They are just packaged together in some situations. But the confusion is understandable – and this is where it comes from.
When you purchase health insurance you are purchasing a product that is intended to pay the bills to get you back to health. These services can be very costly which is cause for the outrageous hikes in health care insurance over the last decade.
Life insurance is tied just to the death rate of a large demographic of citizens. They use the numbers of thousands of individuals to establish a mortality rate for each age, orientation, nationality, and so on. They cannot discriminate for race but believe me they know the difference on the mortality tables.
For this reason; life coverage rates are much more stable.
The life insurance strategy is not paying for your health care costs. So regardless of the fact that it is so expensive to get you healthy – as lengthy as you continue to make your life insurance premium payments your rates should not change. (if you have a level face term or whole life insurance strategy.)
Health Events can Affect Your ability to get a Life Insurance Policy though, How does this work?
If you bite the dust due to an accident or sickness the face amount of the arrangement (provided you obtained insurance through a reputable insurance company and have a standard term or whole life insurance strategy) will pay the proceeds to your beneficiary/s. The end. There’s not much else to it.
So if you are worried that your rates will go up on your life coverage after you have had a health occasion, don’t worry.