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5 Reasons to Own Both Health Insurance and Term Insurance

Learn about the best reasons to have Both Health Insurance and Term Insurance for better coverage and financial security. To know more about health insurance policies in detail, Visit Now!

  • 2,840 Views | Updated on: Dec 27, 2023

The rising cost of healthcare facilities as well as the current pandemic, have made it essential for everyone to have an emergency financial backup. This kind of backup comes in the form of term insurance and health insurance. While the former provides financial support to the family of the insured due to an unfortunate situation, the latter is beneficial for footing the medical expenses of the policyholder in the case of severe illnesses and injuries.

What is Term Insurance?

Term insurance is a life insurance policy where the insurance provider or the insurer provides coverage to the insured in case of his/her death, in return for a fixed number of premiums given towards the sum assured amount. These payments are made only during the tenure of the policy, and if anything happens to the policyholder within that tenure, then the insured’s family receives the sum assured as a death benefit. However, if the insured survives the term or passes on after the term, then no payout is applicable.

Recently, insurance companies have started offering Return of Premium term plans that offer a survival benefit to the policyholder. If the insured survives the policy term, the company will pay the total premium paid as maturity benefit.

What is Health Insurance?

Health insurance covers the medical expenses and hospitalisation bills of the insured. In case the policyholder has to pay heavy medical bills due to an ailment or injury, then the health insurance settles these expenses with the hospital or medical care facility. The diseases and health conditions covered under a health insurance plan will vary as per the policy and insurance company.

Importance of Term Insurance and Health Insurance

1. The need for life cover and health cover

With a life cover under a term insurance policy and a health cover under a health insurance policy, you can ensure that the life, health as well as the finances of you and your family are completely secure.

2. The ease of paying affordable premiums

The premiums for term plans are not only fixed as per the tenure but are also lower as compared to other insurance plans. While choosing a health insurance plan, a healthy lifestyle and a lower age limit can help you avail affordable premiums on the policy.

3. Tax benefits on health insurance and term insurance

The premiums paid for both term insurance and health insurance can be deducted from tax under the Indian Income Tax Act, 1961. Term plan premiums are tax-deductible under Section 80C, while health insurance premiums fall under Section 80D. Similarly, the death benefit payout under term insurance is exempt from taxation under Section 10(10D).

4. No need to dip into emergency funds and savings

With total financial coverage on your life and health with term insurance and health insurance, your hard-earned money is always secure. Health insurance takes care of emergency medical expenses. Additionally, term plans allow your family a secured financial future in case of your sudden demise. Thus, you or your family do not have to dip into the savings in case of any eventualities.

5. Stay prepared for unforeseen circumstances.

You can trust a term insurance policy to provide robust support to your family for the fulfilment of their financial needs at a time when you’re not around anymore. Moreover, a health insurance plan covers critical illnesses related to cancer, liver, cardiac and neuro, along with protection against accidental death or disability.

As a pure protection term insurance plan, Kotak’s e-Term Plan has the following important features such as:

  • High coverage with affordable premiums
  • Long-term insurance coverage
  • Cover for major illnesses
  • Tax benefits
  • Flexible premium payment
  • Protection against accidental death
  • Financial security

Kotak’s health insurance plan, the Kotak Health Shield, is a fixed benefits plan that offers comprehensive health cover. The vital features of the Kotak Health Shield include:

  • Critical Illness Benefit for cancer, hypertension, liver failure and some other diseases.
  • Additionally, surgical procedures for organ or marrow transplant, open heart replacement, open chest CABG and Aorta Graft Surgery are also covered under this plan.
  • Apart from that, the health insurance plan also covers paralysis, major burns, loss of speech and hearing, coma and stroke with severe symptoms and more.

Conclusion

Recent studies have shown that only about 50% of India’s population holds an insurance policy, which is mainly due to the lack of knowledge on the importance of an insurance cover. With better awareness, one should make it a point to cover their health as well as life with an appropriate insurance policy.

- A Consumer Education Initiative series by Kotak Life

Amit Raje
Written By :
Amit Raje

Amit Raje is an experienced marketer who has worked in various Fintechs and leading Financial companies in India. With focused experience in Digital, Amit has pioneered multiple digital commerce in India. Now, close to two decades later, he is the vice president and head of the D2C business department. He masters the skill of strategic management, also being certified in it from IIMA. He has challenged his challenges and contributed his efforts in this journey of digital transformation.

Amit Raje
Reviewed By :
Prasad Pimple

Prasad Pimple has a decade-long experience in the Life insurance sector and as EVP, Kotak Life heads Digital Business. He is responsible for developing user friendly product journeys, creating consumer awareness and helping consumers in identifying need for life insurance solutions. He has 20+ years of experience in creating and building business verticals across Insurance, Telecom and Banking sectors

Kotak e-Term

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  • Life Cover till 85 years for Life & Life Secure Option
  • 3 Payout Options
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