What's the difference between private health and life insurance?
A lot of people tend to compare health insurance and life insurance to try and decide between the two. However, when you look at the two types of insurance closely, you'll see it shouldn't be a matter of deciding which one you need, 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
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.
Advances in technology have allowed us to extend our standard life expectancy, which can mean lengthy hospital stays or expensive medical bills if we do contract a debilitating illness or injury. Health insurance offers coverage for a wide range of procedures and treatments when these problems eventually occur.
Unlike health insurance, life insurance is an amount of money you choose that you insure to cover your debts and take care of your loved ones when you pass away. People take into account debts such as your mortgage or rent, personal loans, credit cards, and future education costs if you have children. This can serve as a replacement income for your family if they were relying on yours, or it 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.
Which is more important?
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.