Term Life Insurance vs. Health Insurance: Which One is Better for You?

Term Life Insurance vs. Health Insurance

    Term life insurance and health insurance are both very important, but they are not the same thing. To make sure you’re getting the right coverage, it’s important to understand how they work and how they compare to each other. From there, you can make an informed decision about which policy is right for you and your family. Check out this guide on term life insurance vs health insurance to get started!

What Is Term Life Insurance?

    Term life insurance, also known as pure life insurance, is a type of permanent coverage that provides protection against death or terminal illness during a pre-determined term (hence its name). There are two types of term life insurance available to consumers in today’s market—level term and decreasing term. Each type has different provisions and premiums associated with it, so it’s important to take a closer look at each before choosing what’s right for you. Term life insurance policies typically offer lower monthly payments than their permanent counterparts; however, they don’t provide lifelong coverage like whole life does. Term policies generally have a term length between 10 and 30 years; once your policy expires, you can no longer receive any benefits from it unless you renew your policy or purchase another one. If you pass away within your term period without renewing your policy, your beneficiaries will receive any funds remaining in your account balance.

How Does It Work?

    When it comes to purchasing life insurance, many people opt for term life insurance instead of health insurance (though others will choose both). It’s important to understand how each type of plan works, and whether or not you need both types in order to get the best bang for your buck. Let’s start with term life insurance... Term life insurance policies are designed to provide coverage for a specified period of time—usually 10, 20 or 30 years—and can be purchased in any amount up to a certain maximum dollar amount. If you pass away during that time period, your beneficiaries will receive a payout from the policy. That means if you have children who are still young when you die, they could use that money toward their college education down the road. Term policies don't cover health-related issues like cancer treatments or routine checkups; those are covered by health insurance plans like HMOs and PPOs. So what does that mean for someone who needs both kinds of coverage?

Why Do I Need It?

    In an ideal world, everyone would have health insurance that covers everything they need and more--but we don't live in an ideal world. As a result, you might need some extra protection that goes beyond your primary health insurance policy in order to keep yourself covered and your family safe should something unexpected happen. Term life insurance can help fill that gap by providing a lump sum of money to support your loved ones should you pass away unexpectedly or due to a catastrophic injury like cancer or heart attack. However, it's important to understand exactly what you're getting into with term life coverage before deciding if it's right for you; read on for everything you need to know about making sure your family is covered no matter what happens!

What are the Options, and How Do I Choose a Policy That's Right For Me?

    The first step in getting health insurance is deciding which type of policy you need, and then finding an affordable plan that will fit your budget, lifestyle, and medical needs—not an easy task. There are several types of policies out there, from individual to family coverage, and some with extensive coverage or high deductibles depending on your current needs.

How Much Does it Cost?

    The average term life insurance policy can cost between $15 and $100 per month, depending on how much coverage you want and how risky it would be to insure you (for example, smokers will pay more than non-smokers). The maximum amount of coverage allowed by law varies from state to state; most people get a policy that covers at least six times their annual income in case of death. Health insurance premiums also vary depending on your health status, location and type of coverage desired.

When Should I Purchase My Policy, and How Long Should I Keep It Active?

    Once you’ve decided on a plan, you should purchase it as soon as possible. While many policies have a waiting period before they kick in, your insurance won’t cover you until that time has passed (assuming it covers accidental death at all). And depending on what type of plan you’re looking at, there may be an annual policy fee or some other stipulation that prohibits coverage during certain times of the year; again, be sure to read over everything before purchasing. Some policies require immediate payment; if you fail to pay by your due date, for example, there might be late fees attached to your premium.

What Happens if I Don't Have Coverage and I Become Seriously Ill or Die?

    If you don’t have a health insurance policy and become seriously ill or die, here’s what can happen: Your medical bills will pile up, and you might not be able to pay them all. If that happens, your spouse might not be able to maintain your family’s lifestyle. If you have kids, they could end up going into debt from their own unpaid medical bills—which could also negatively impact their credit scores.

Can My Family Get Coverage After I Die Without Having to Reapply?

    Term life insurance, unlike health insurance, does not require re-application after an insured person dies—and that’s a good thing if you want to make sure your family isn’t forced to re-apply when you die. With term life insurance, coverage goes into effect immediately (usually within one business day), meaning your family can reap its benefits quickly after your death occurs.

Is There Anything Else I Should Know About this Type of Coverage Before Buying a Policy?

    This type of policy typically has a much lower monthly premium than a health insurance plan, which makes it more affordable overall. However, health insurance plans are required to cover many more things, so they may be better suited to your needs if you have a significant pre-existing condition. It’s important to note that these policies do not include any sort of coverage for medical expenses outside of death; in other words, term life insurance does not payout if you get injured or sick and need expensive medical care. If you’re worried about paying off massive hospital bills in case something happens, consider getting both types of coverage.