Difference Between Private Health and Life Insurance

A lot of people tend to compare health insurance and life insurance to try and decide out of the two, which one they need. When you look at the two types of insurance closely though, you'll see it's not a matter of deciding out of the two what you need, it’s looking at them individually as they offer very different services. The main differences between health and life insurance are:

• What you are covered for
• When you are covered
• How much you can be covered for

Health insurance

People take out health insurance to assist with the cost of medical bills, as the insurers tend to cover all or part of the costs. It can be used for standard procedures like a general doctor’s visit or a pregnancy, but it can also be used to cover the costs in cosmetic surgery. Taking out private health insurance can allow you to have your choice of a private room in hospital and can permit you to have your choice of doctor. Living in Australia in the 21st century, we have access to many resources when it comes to our health. Advances in technology has allowed us to extend our standard life expectancy age, which can mean lengthy hospital stays or expensive doctor’s bills if we do contract a debilitating illness or injury. Health insurance offers coverage for a wide range of procedures and treatments.

Life insurance?

Life insurance is an amount of money, which you insure your life for. People take into account debts such as your mortgage, or the price it costs to rent your home, personal loans, credit cards, future education costs. In the event they pass away prematurely, the lump sum of money is paid out to their beneficiary, usually their partner or children. This can serve as a replacement income, as they have lost yours, or can be used to pay off all your debts in one go. A lot of companies will also pay out part of the lump sum early, to cover funeral expenses.

What do you need?

As you can now see, there is a big difference between the two types of insurance. It's not a matter of picking one or the other. You need to assess your individual situation and decide what is right for you.