Money and Business

The Difference Between a Health and Life Insurance

A lot of people find themselves confused about life insurance and health insurance. When stated in simple terms, health insurances prevent a person from paying a very large bill by covering a part or your whole medical expenses. On the other hand, a life insurance will give your chosen beneficiary the entire value of your policy as a sum if ever that you will die.

There are actually two types of health insurance: term life and whole life. The term life type is less expensive compared to the whole life one. You can get your hands on a term life policy in just a year up to a maximum of thirty years. When you have a term life policy, the beneficiary will only get the money upon your death. Most individuals select the term life insurance especially when they become older.

On the other hand, a whole life insurance is like a combination of a life insurance and investment plan. The amount that you will be paying monthly is put into the life policy while a part is also placed in the investment that you will be selecting. You may invest your money on stocks, a mutual fund, money market instruments, bonds, and many others. If you have a whole life insurance, the insured will be forced to save some money because this amount will then be used upon retirement. However, the only issue about life insurances is the amount of commissions and fees that are involved. When you consider all of these fees, the total amount for a whole life insurance might be too expensive for one person.

Although there is a big difference between a life insurance and a health insurance, both are dependent on the health and aged of the individual. The younger the age, the lesser will be the monthly premium. If you have poor health and you are older, you will most likely pay high premiums.

So which among these insurance policies should you pick? Unfortunately, a black and white answer to this question is unacceptable. If your employer offers you a health insurance and a low value life insurance, then you should go ahead and take advantage of it. However, if the said employer offers you with only one, the insurance policy that you will be selecting should depend on your monthly salary, spending, and your total financial status.

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Money And Business