This is the first article in a two-part series on the essential differences between life and health insurance, and the reasons you may want to get them.
It is part of a larger collection of stories and practical finance tips published by Metrobank to help people learn from the experiences of others, and to pick up lessons on personal finance and sound money habits beyond the pandemic.
You can read Part 2 by clicking here.
How can you tell the difference between life and health insurance?
- Health insurance protects you from financial problems stemming from medical costs when you become ill.
- Life insurance primarily provides your loved ones with a cash benefit upon your death.
Life insurance and health insurance: Can you tell the difference?
You may be wondering if the time is right to get life or health insurance, especially after recent global events. With the possibility of similar events happening again in the future, you may feel compelled to get insurance for you and your family.
Some may get an insurance policy on a whim without knowing the underlying principles. It’s a good thing that most insurance providers in the Philippines are regulated by the Insurance Commission (IC), and insurance underwriters are strictly required to inform clients about policies that fit their needs. With so many possible options, you still need to arm yourself with the right information to make the best choice.
Two of the most popular insurance products in the Philippines are health insurance and life insurance. Both products are paid over an agreed timeline and guarantee compensation when specific conditions are met.
To put it simply, health insurance protects you from financial problems stemming from medical costs when you become ill. Meanwhile, life insurance primarily provides your loved ones a cash lump sum upon your death.
What makes life and health insurance distinct from each other?
Health insurance can help minimize the effects of paying medical bills when you become ill. These include doctor’s appointments, hospitalization, medicine, tests, and surgeries. Health insurance also provides benefits if you’re diagnosed with any of the pre-defined critical illnesses, such as heart attacks, strokes, and cancer.
Meanwhile, life insurance is designed to protect your beneficiaries from immediate financial issues, such as loss of income, by releasing cash upon your death due to accident or illness. You may be also covered if you suffer a permanent disability that leaves you unable to work and provide for your family.
Life insurance also comes in two types: term life insurance that covers you for a specific period of time, which range from a month to several years, and whole life that covers you until your death.
Read Part 2 here.
