In times when uncertainty looms large, one would plan the future carefully and mindfully. Especially where life is concerned, there is comfort in knowing that your family is going to be secure financially even if your health takes an unexpected turn. No matter what stage of life you are at, it is crucial to start planning for future uncertainties.
Life can bring unprecedented circumstances and insurance covers can eliminate the risk of your family grappling with finances. Both play an important part in endorsing a secure future for you and your loved ones. With healthcare expenses shooting through the roof, it becomes imperative to have a safety net to protect your finances from going haywire during emergencies. But here, it must be understood that though both Health insurance and Life insurance are there to set you up financially, they are as different from each other as chalk and cheese.
So, which one should you get? Ideally, having both can be the safest bet, but considering that paying premiums for both can be challenging, it is advisable to be under the cover of at least one of the two. Let us scour through their advantages to understand the difference. Life insurance vs Health insurance explained.
What Do They Cover?
Have you ever thought about what would happen to our loved ones if something untoward happens to us? More often than not, it is the financial security that is daunting. Life is uncertain. In households where family members are dependent on one earning member, Life Insurance ensures that in the event of an earning member’s unexpected death, the insurance pays a lump amount to the beneficiaries or dependents to compensate for future income loss. It fulfills all expenses such as Critical Illness Compensation, Children’s Education, Children’s marriage, school and college education etc, so there is no financial instability in the absence of the earning member.
Just as much as your family needs security, your health needs to be covered too. The fast-moving city life has not only led to health-related problems but also increased the cost of living and hence expenses. To make sure that you and your family are financially secure in times of emergency, it is important to have your health preserved.
A medical insurance policy in uae is a type of cover that ensures financial coverage for surgical and medical expenses incurred by you during these unprecedented circumstances when the insured or his family members are hospitalized.
Should you get one?
Though it is advisable to be under the cover of Life insurance, it is not compulsory, except when you take out a mortgage in the UAE. This is because, In the event of your untimely demise, the Life Insurance will pay any home loans you owe, in your absence.
Health insurance is mandatory in the UAE. Most employers are bound to extend a health insurance policy for their employees and their dependents. In case the employer does not, you must buy one on your own and your dependents.
What Benefits Do They Entail?
In the UAE, Insurance companies give you the choice of choosing between 5 types of Life Insurance- Term Life Insurance Policy, Whole Life Insurance Policy, Universal Life Insurance Plans, Indexed Universal Life Insurance and Variable Universal Life Insurance. Along with the basic financial security for your family, Life Insurance offers you several other benefits such as critical illness cover, investment, and financial growth options.
Since Health Insurance covers you for expenses incurred due to medical emergencies, and for protection, not investment, the premiums are mostly fixed. In summary, where you hold a medical assurance plan and abstain from making any kind of claim for any medicament or method throughout the one-year tenure of the policy, you become eligible to be rewarded No Claim Bonus. Other added benefits a health insurance extends include- Maternity cover, terminal illness, doctor consultation, surgeries, medical services such as physiotherapy, gynecology, nutritionists that you as an insurer may consult.
How Does The Premium Cost Differ?
Life Insurance premiums are usually easily affordable, long term and flexible, but added benefits included may increase premiums. Factors like age, health and amount insured can have a direct impact on the amount of premium on your Life Insurance policy. Depending upon the type of Life Insurance you decide on, the premium paid on Life Insurance can either be fixed or flexible.
The premiums paid for Health Insurance are mostly fixed during the time of purchasing the policy. Since Healthcare is free for UAE nationals, the expats shell out exorbitant amounts purchasing policies from private companies. The cost of Health Insurance is fairly high as compared to Life Insurance. Hence, premiums that ex-pats have to pay are costly.
What About Maturity Benefit
One of Life Insurance’s biggest benefits is the maturity Benefit. This means that if the insurer survives until the maturity of the policy, a Maturity Benefit is liable to be paid to the policyholder. This benefit can double the lump amount you receive in case there is no claim made during the tenure and all premiums are returned to the insurer. Whereas Health Insurance does not offer any Maturity Benefit. It only compensates for your health situation presently.
So, How Long Can Life & Health Insurance Policies Be Extended?
Life insurance is generally for a fixed tenure. And is usually terminated after the completion of the tenure of insurance. This translates to the life insurance premium you pay monthly remaining the same throughout the tenure irrespective of your age, your health condition otr the length of the policy.
The tenure of a Health insurance policy is not fixed and can be extended to reap maximum benefits for a longer period of time. So, though both offer cover, there’s much ado about how different a purpose Life insurance and a Health insurance policy serve- Safety, financial loss and most of all, being responsible for self and loved ones.