Health Insurance vs. Life Insurance

• Term insurance
  It provides coverage over a specified length of time—ranging anywhere between five to 30 years—as long as monthly premiums are paid. It pays out a fixed amount to the plan holder’s beneficiaries so long as the death occurs while the plan is active.
  
  
• Whole life insurance
  A form of permanent insurance that pays out benefits upon death regardless of the plan holder’s age. The regular premium payments can be accrued into a fund, which pays out cash dividends that can be used while you are still alive.
     
• Endowment
  Like term insurance, this type of plan provides coverage for a limited time or up until a certain age so long as regular premium payments are made. A lump-sum payment is made either at the end of the coverage period or upon death. It can provide dividends, as well.
    
• Variable life insurance
  This is a combination of life insurance and investment, giving plan holders various investment options depending on their risk appetite. The term “variable” refers to the possible change in investment values, making premium payments more flexible.

What is health insurance?

Health insurance is a type of insurance that covers medical, surgical, and possibly dental expenses that you may incur during the period of coverage. Additional benefits can be availed to cover certain medical services and treatments, especially for critical illnesses. Some insurers may require these procedures to be done only at select healthcare providers.

Having health insurance in the Philippines is essential for families, especially mothers, as medical expenses and maternity expenses can take a toll on your finances. It also ensures that there are safety nets in place if a medical emergency were to occur.

Factors to consider when choosing insurance

Despite the similarities and differences between the two, both life and health insurance coverage can be helpful. It’s a matter of deciding which type will address your concerns best. Here are some factors to consider before purchasing a plan:

• Goal
  The benefits from life insurance are meant to cover the needs of your dependents when you pass away, especially when it happens unexpectedly. Meanwhile, health insurance specifically covers medical expenses—from treatments to procedures and services.
  
  If the needs of your spouse and kids are a more pressing concern, availing of life insurance would be advisable. If covering unexpected illnesses takes priority, health insurance would be more appropriate.
  
  
• Dependents
  As mentioned earlier, life insurance better benefits those with dependents—from parents with young kids to sole family breadwinners. The payout from a life insurance plan can act as a cushion fund to help them through the loss.
  
  For those without dependents, health is one of the biggest investments they can have so they can continue working and enjoying life. Health insurance provides these people with the resources to keep their health in check, lessening their risk for illnesses.
  
  
• Coverage Period
  It’s important to consider the scale of the need when selecting an insurance plan. Life insurance plans tend to span over long periods of time or mature when the plan holder reaches a certain age. Life insurance plans provide more long-term coverage, making it unlikely to address any current needs.
  
  Meanwhile, health insurance doesn’t have any direct payouts. Instead, they can cover doctor’s appointments, lab tests, or hospitalizations throughout the coverage period. This means that health insurance plans are better for more short-term needs.
  
  
• Risk
  Aside from fulfilling needs, insurance plans serve to mitigate risk in your life. Life insurance addresses the risks of death and the loss of security of your dependents by providing benefits to them. Meanwhile, health insurance addresses the risks of illnesses and health problems by covering or reimbursing certain costs to either prevent or treat these problems.
  
  Depending on your occupation and lifestyle, either life or health insurance may be more appropriate for the risks you face.
  
  
• Age
  Age plays a big part in deciding what kind of concerns and risks you may want to address with your insurance plans. Older people are more at risk of health complications, while younger people may not have enough cash built up to cover devastating emergency expenses.
  
  
  Generally, young professionals with no dependents are better off with health insurance alone, while parents and older individuals may need to invest in both life and health insurance plans.

Different Policies for Different Priorities

Both life and health insurance are essential as they provide you and your loved ones safety and security in times of need. The difference lies in when these needs are most likely to occur and how they should be addressed. Life insurance provides your beneficiaries with the means to live, while health insurance covers the treatment and prevention of any health problems that may occur.

BPI AIA provides both life insurance plans and health insurance plans that work for different types of budgets and needs. Take a step towards a better future and talk to a Bancassurance Sales Executive today.