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Dilemma: Life insurance or Health insurance … what do I choose?

Which is more important for you – your ears or your eyes? Which do you think is imperative for your survival – water or air? Which among food, shelter and clothing can you dispose of? A tough set of choices, aren’t they? Can you choose one from my set of options and live without the other?

No, isn’t it? Every option I presented is a must and doing without either of the options is impossible. When it comes to life and health insurance, why do we deliberate on picking only one from them? Aren’t both of them important in our financial portfolio or having one is enough?

There is an ‘if’ when you spell ‘Life’ and this ‘if’ represents all those uncertainties we face in our life. Some uncertainties cause huge financial crisis and for a common man meeting such crisis is an impossible task. Insurance, both life and health, helps us in meeting such uncertainties in our life by compensating for our financial loss.

Deciding which one is more important than the other is like seeking answers to the questions we posed before. For those of you who are still skeptical, let’s discuss the importance of each separately.

Life insurance:

  • Compensation of financial loss – A death causes emotional and financial loss. Though emotional loss is impossible to compensate, the financial aspect of the loss can be compensated by a life insurance policy. It acts as an emergency fund and comes to the rescue of the family of the deceased so that they can meet their daily expenses even in the absence of the bread-winner

  • Security for children’s future – A child insurance plan provides security for the stable future of the child in case the parent meets with an unfortunate incident. By waiving the premium in case of death of the insured and continuing the plan till maturity, a child plan provides the funds exactly when they had been planned by the parent for the child’s future.

  • Retirement corpus – A pension plan comes in handy in building up a retirement corpus and annuity payments from the pension plan provide a steady source of income post retirement

  • Wealth creation –In keeping with the evolving times, your life insurance policy also helps in wealth creation through its unit linked variant. These plans provide growth in accordance with market trends as well as life insurance coverage.

Read More- List of Health Insurance Companies in India

Health insurance:

  • Financial blanket against the rising incidence of diseases – It is no secret that the incidence of diseases is on the rise due to the lifestyle choices of modern day individuals. Illnesses which were earlier associated with old age are now common among young and adult alike. These diseases require a blanket to provide against their financial implications and a health plan is the answer.

  • Protection of your savings – We toil our entire lives to save for our child’s education, asset creation, planning a retirement corpus, etc. and one single incidence of a medical emergency is enough to wipe out our entire savings in one strike. Medical inflation is increasing every day and in the absence of a fund solely for meeting a medical contingency, providing for the hospital bills is a threat to your savings. A health insurance plan specifically provides for this emergency fund and meets any medical contingency you might face in your life.

Peace of mind, financial security and tax savings are additional benefits which come free with a life or a health insurance policy. Both these insurance products are important in their respective fields and any one cannot be chosen between them.

Where one helps in providing a financial cushion in case of death, the other provides the same cushion against a medical emergency which might not cause death. Both these plans are as important as air and water, eyes and ears and food, clothing and shelter. As you cannot dispose of any item from this list, you cannot dispense with either a life or a health insurance plan too.