Health Insurance and Life Insurance - An Explanation

Health insurance is designed to protect someone against having to pay out of pocket for expensive medical bills by offering coverage for different medical procedures and treatments.

Life insurance is totally different and is designed to pay a lump sum of money to whomever the policyholder specified should receive the money in the event of their death.

Life insurance policies are generally sold as either a whole life or term life policy. The simplest form of insurance is term life insurance. This is also the most inexpensive form because it only pays out when the policy holder dies. Term life insurance can be bought for as short as one year to as long as thirty.

For there to be a pay out from a term life insurance the policy holder must die within the term of the policy. Commonly those who opt for term life insurance policy feel that they are in the later years of their life or if they feel like they are at more risk for a short period of time.

A whole life insurance policy is both a term life insurance policy as well as an investment plan. Every premium that is paid into a whole life insurance policy is divided into the two. The portion of the premium that is assigned for investment purposes such stocks and bonds is personally selected by the policy holder.

There are a lot of people who opt for whole life insurance because it offers the protection for their family as well as a savings that is commonly reserved for retirement. Be selective with these policies because they often come with both fees and commissions so they may not always be the wisest form of investment. Be sure to take all costs into consideration before signing anything.

The costs involved in both life insurance and health insurance are heavily based upon the policy holder’s ages and state of health and younger people generally get lower rates. Even though they are based on some of the same factors they are quite different in coverage.

Many people still think you have to choose between life and health other like they are similar to each other. Each different policy has their own specific importance and for some people both are necessary.

Many employers are offering health coverage with the ability to purchase additional life insurance. If this is an option for you then take advantage. Generally with employer’s health and life insurance policies are offered at a group discounted rate.

Choosing between the two comes down to personal needs and financial circumstances. If you are only able to afford one then you should go with health insurance. People get hurt and sick everyday. With the high prices of the hospital and ambulance one visit could leave you hurting financially for years.

You may consider buying a term life insurance if you are facing huge medical bills and have no health insurance. This won’t help you right now but at least it will help your family financially in the event of your death.