Insurance is a blessing when the worst possible scenario you could ever think of comes to life. Loss of property and goods, loss of good health, an injury so severe the recovery is prolonged, loss of valuable possessions are examples of such scenarios. Insurance on each of the above-mentioned examples are possible based on certain criteria. When you think of guarantee for our life, there is none. But providing financial aid to loved ones, use of monetary support in the case of incapacity are few options you can choose from. While making a decision about insurance, a clear picture needs to be presented in front of you to choose the most suitable insurance premium for you and your family. Often, this picture is vague and filled with loopholes.
Understanding the difference between life insurance and medical insurance is essential for making the right decision while purchasing an insurance policy. Here are few aspects that differentiate them from each other:
1) Life insurance is where a contract is agreed upon, involving 2 parties, the insurance policyholder (insured) and the insurer (the insurance company or employer). The insurer promises to pay the beneficiary (a person the insured nominates) a sum of money that the insured has given to the insurer. Medical insurance is insurance taken against medical expenses that the insured may have to incur in case of work-related accidents or illnesses.
2) The purpose of life insurance is life coverage provided to the family or dependents to have financial support after the demise of the insured. In the case of medical insurance, its main objective is to cover the costs of treatment for the medical condition. These are advisable for the resident as well as non-resident employees. Companies are willing to provide insurance for employees to be motivated to work as they do not have to worry about the family. Plans for native employees and application for a foreign workers medical insurance have their own guidelines that are to be followed.
3) The importance of life insurance is financial aid for the family in the cause of untimely death. Whereas, medical insurance covers hospitalization costs and other treatment related expenses. This is very helpful for those who have applied for the policy as they are away from their own country and need proper guidance and know-how of the procedures.
4) The insurance payable by the insured can be lump sum amounts or small payments in regular installments. The lump sum amount is paid to the beneficiary (nominee) in life insurance. The medical insurance payable by the insured gets deducted from his monthly wages or payroll. The amount is used for the treatment fees, but there is an upper limit to the coverage in this case. Lump sum payment or small amounts payable is based on the seriousness of health of the insured.
Though both have their differences, yet both are equally essential. Insurance for self as well as insurance for family helps add value to life.