Difference Between Life Insurance, General Insurance, and Health Insurance
Each type of insurance – Life Insurance, General Insurance, and Health Insurance – serves a distinct purpose, addressing specific aspects of your financial and personal security. While life insurance focuses on providing for your family’s future, general insurance safeguards your assets, and health insurance ensures your well-being in times of medical need.
| Purpose | Provides financial protection in case of the policyholder’s death. | Covers a wide range of non-life risks, such as property, vehicles, travel, etc. | Offers coverage for medical expenses and healthcare-related costs. |
| Benefit | Pays out a death benefit to beneficiaries upon the policyholder’s death. | Offers compensation for damages/losses to insured assets (e.g., property damage, theft). | Covers medical expenses, hospitalization costs, and related healthcare expenditures. |
| Premiums | Generally higher due to longer coverage and potential cash value growth. | Varies based on the insured asset, its value, and the level of coverage. | Premiums are influenced by factors like age, health status, coverage scope, and more. |
| Riders/Add-Ons | Offers riders like critical illness, disability, etc., for added coverage. | Additional coverage options like personal accident, loss of baggage, etc. | Riders for maternity, pre-existing conditions, etc., can be added for specific needs. |
| Payout | Lump sum payout to beneficiaries upon the policyholder’s death | Compensation for repair/replacement costs for the insured asset. | Direct payment to healthcare providers or reimbursement for medical expenses. |
| Tax Benefits | Premiums paid and benefits received are often eligible for tax benefits. | Premiums may be tax-deductible in some cases; claim payouts are generally tax-exempt. | Premiums and benefits are often eligible for tax benefits under prevailing laws. |