What’s the difference between Life insurance and Health insurance?
There are many different types of personal insurances out there, and whilst it might be easy to distinguish between your cover for your house, car, and contents, figuring out the difference between the other types of personal cover can be tricky.
One of the most common questions people ask is what’s the difference between Life insurance and Health insurance? Often people assume they are one in the same, but there are actually a few important differences to note.
To help you understand why both are equally important types of cover, we’ve put together some information on each to make it easier.
Health Insurance
One of the most popular types of personal insurance in New Zealand, and perhaps one of the most important, health insurance covers your medical expenses for things like surgery and other medical procedures.
It allows you to have faster and more affordable access to the medical treatment you need if you are diagnosed with an illness. Not only does health insurance cover your
medical bills, but it can also cover specialists and tests that help you get back on track to good health and being able to work again.
Many people believe that they don’t need health insurance because ACC will cover them, but they forget that ACC only covers one-off accidents and not illnesses or ongoing issues. Relying on the public health system also often means long waits and limited access to important medications - something that will be the last thing you need if you fall seriously ill.
Life Insurance
Life insurance differs from health insurance in that you or your family will receive a lump sum payment should you unexpectedly pass away or be diagnosed with a terminal illness. This type of cover is particularly important to have if you have dependents who rely on your income.
Your Life insurance policy helps to cover funeral expenses and any living costs your family might need once you are no longer around, for example, paying off the mortgage or leaving money for your child’s education. It’s designed to relieve the stress for your family so you know that they are cared for should the worst happen.
With life insurance, you’re paid out the agreed amount if you’re diagnosed with a terminal illness or pass away and there are different premium structure options. You can opt to pay more each year as you get older, or lock in the premium to a certain age. This is something that your adviser can explain and they can help you calculate what’s best to save you money over the medium to long term.
There are many different types of personal covers that fall under life insurance, including trauma cover, total and permanent disability, income and mortgage protection cover, as well as accident covers.
Life & Health Combined
Health insurance and Life insurance may serve different purposes but they work very well together to ensure you and your loved ones are covered when you need it.
If you want to know more about how Life and Health insurance can benefit you and your family, get in touch with our friendly team to book in a free, no-obligation review.