Life Insurance Vs Health Insurance Vs Term Insurance

Life is unpredictable and uncertainties can happen to anyone at any time. Nowadays having life insurance is a necessity that promotes the idea of recovery from the loss. Insurance provides financial security to an individual against unforeseen events of life. There are different types of insurance available in the market such as health, term, life, motor, or valuable product insurance, travel insurance, etc.

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Health, Term and Life insurance, three of them are the most important type of life insurance that provides safety to human life. But what type of insurance suits your needs is a prime question here. Let’s discuss each of them in detail:

Which insurance is a must-buy? 

Before buying any insurance policy, it is very important to learn about the features and benefits of policies. This will help the customer to make an informed decision about his/her selection. Insurance-related to products such as phones, cars help you recover the loss of non-living units financially. But the uniqueness of health, term, and life is that it supports the loss of livings beings at the time of need. The main objective of insurance is to offer protection to loved ones who tolerate and suffer instability due to uncertain circumstances. It is a universal truth that there is one recovery from the death of your loved but financial help is important during critical times to keep family united. So, let’s understand the importance of each insurance in detail:

Life Insurance Plans – The life assured is eligible for the benefit on the maturity of the policy. The guaranteed amount is paid in case the person is alive or dead. The policyholder has the option to set the policy tenure and if in case he/she is not alive then the amount will be received by the nominee. 

Health Insurance Plans – These plans assist the policyholders against medical emergencies and expenses. It helps an individual in the critical times of their medical emergencies which could be anything such as cancer, stroke, COVID-19, etc. 

Term Insurance Plans – Term Insurance is a pure protection plan for a fixed time such as for 20 or 40 years. It is specifically designed to provide a lump sum amount to the family members in case of an unfortunate demise of the policyholder. In such a situation, the nominee receives the amount. No claim to the amount is applicable if the life assured survives till the maturity of the plan. 

Why do we need Term Insurance and Health Insurance? 

Both plans are important insurance plans and have a different set of features and benefits. Term insurance provides financial assistance to your nominee/beneficiary in case of some unforeseen circumstances such as the death of the life assured. On the other hand, health insurance is specifically designed to cover all the medical expenses incurred in case of hospitalization or when diagnosed with a critical illness. Health insurance plans offer a wide variety of benefits such as day care procedures, domiciliary hospitalization, etc. Due to this ongoing pandemic, the expenses incurred on the treatment of COVID -19 are also covered under the plan. 

There are different types of health insurance plans available in the market such as Individual Health Insurance (covers a single person), Family Floater Plans (covers family members), ULIP, and Senior Citizen Health Insurance. Whereas Term insurance plans are Level term, Premium refund, Increasing, decreasing, convertible, and a plan with riders. 

Life Insurance Vs Health Insurance Vs Term Insurance

With the availability of so many insurers in the market, choosing the right one is a quite tiresome task. We have made it easy for you! The table illustrates the comparative analysis of life insurance, health insurance, and term insurance. Let’s understand them in detail: 


Life Insurance 

Health Insurance 

Term Insurance 


Life insurance policies offer coverage/ sum assured amount on the maturity of the policy. 

Health Insurance policies offer coverage against medical emergencies or claims within the policy tenure. 

Term Insurance policies offer coverage against the policyholder’s premature death within the fixed policy term. 

Policy duration 

5 – 30 years

5 – 10 years 

10-30 or 45 years


The premium prices of life insurance are relatively higher than term insurance 

Premium amount increases as the policyholder’s age increases 

Term insurance is a pocket-friendly policy. The premiums are quite lower in comparison to other insurances. 

Death Benefits 

This policy provides death benefits in case the life assured is surviving or his/her demise. The death benefit is payable on the maturity of the policy. 

In this, no death benefits are payable, if the insured dies immediately because of the illnesses and without any kind of hospitalization.

Death benefits are payable in case of the demise of the life assured dies till the maturity of the plan. 

Common Benefits of Health, Term and Life Insurance 

Some benefits are common for these insurance policies. 

  • Premium payment mode – You can make premium payments at one time, partial or in a regular mode. 
  • Buying Process – You can purchase the policies from their company’s website. Online modes are available, while some are offline so you are required to visit the nearest branch. 
  • Portability – All have the provision to transfer the policies from one insurance provider to another. You do not have to pay any additional charges. 
  • Tax Benefits – Get the exemption from the tax under the prevailing laws of the Income Tax Act. 

Who needs these insurance policies? 

  • Youngsters – Investing early in an insurance policy results in lower premium rates. 
  • Individuals having dependent family members 
  • Senior citizens or elder people 

Wrapping It Up!

It is very important to start thinking about investing in insurance at an early age. Because these days the cost of a normal treatment or surgery is touching the sky, and everyone needs financial assistance at times of need. Term insurance plans are different from life insurance plans but both are a necessity in case of an unfortunate event. In such a situation, the family needs financial support and security to bear other related expenses. All three plans fulfil different requirements of the customers. They have their features and benefits, but the selection of the right plan depends entirely on one’s requirements along with the dynamics of a family.

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