Which Is the Best Option: 1 Crore Life Insurance Or 1 Crore Health Insurance?

Posted on: Feb 14, 2024 | 3 mins | Written by: HDFC ERGO Team

Which Is the Best Option: 1 Crore Life Insurance Or 1 Crore Health Insurance?

Life is quite unpredictable. We live amid risks of medical emergencies, accidents, unpredictable ailments leading to hospitalisation, and not to mention drilling a hole in our pockets to pay the medical bills. That’s why one must buy life and health insurance policies with comprehensive coverage. Now, you may have come across the popular 1 crore policies for both and might be wondering where to put your money, as both offer distinct benefits that can safeguard your family’s future. Well, it differs from one person to another as their priorities, health status, medical history, and annual budget may differ vastly. Let’s understand how the two types of insurance differ so you can make a knowledgeable choice.

What is 1 crore life insurance?

This insurance scheme provides lump sum compensation, also known as death benefit, to the family in case of the policyholder's death. The purpose of life insurance is to provide financial protection to the dependent family members of a policyholder after his/her demise. In a one-crore life insurance plan, the insurer promises to pay the sum assured of Rs 1 crore to the insured's family. The insurer pays the amount in exchange for a premium that the policyholder needs to pay at regular intervals.

How does it work?

In the event of the policyholder's unfortunate demise during the policy tenure, the insurer will pay the sum assured of Rs 1 crore to the nominees or beneficiaries. This payout is also known as a death benefit, which the family can use for miscellaneous expenses. The policyholder has to pay premiums on time, either monthly, quarterly, or annually, depending upon the policy terms and conditions. Some life insurance policies offer a maturity benefit if the insured survives the policy term.

What is one crore health insurance?

One crore health insurance is a healthcare plan that comes with a sum insured of Rs 1 crore, which means, the policy will cover your medical expenses up to Rs 1 crore. It offers extensive coverage and ensures you are never short of funds during medical emergencies and planned hospitalisations. With soaring healthcare costs, a high-value health insurance plan will help you avail of the best and highest-quality medical care without worrying about the costs. This plan is beneficial for those with a risk of being diagnosed with critical and life-threatening diseases; usually, treating such ailments is costly, and this is where such a plan becomes beneficial. One crore health insurance plan covers various expenses related to hospitalisation, pre- and post-hospitalisation, major surgeries, modern treatments, critical illness treatments, diagnostic tests, daycare procedures, consultation charges, and organ donor expenses.

One crore health insurance can be bought as an individual health insurance or family floater covering multiple household members.

How does it work?

One crore health insurance works the same way as any other healthcare plan. The insurer will cover your medical expenses up to the sum insured, that is, Rs 1 crore. In exchange, you have to pay a premium and renew it before the due date to enjoy uninterrupted coverage. The premium will, however, be higher than policies with a lower coverage amount because of its extensive coverage. Such plans will have inclusions and exclusions, access to network hospitals, etc., similar to other healthcare policies. The claim process, cashless or reimbursement, will also be the same.

Comparative study/highlighting benefits of both?

Let’s understand how both the policies work:

Life Insurance	Health Insurance
Life insurance protects your family in case of the policyholder’s demise during the policy term	Health insurance is a financial backup that covers a policyholder’s medical expenses, whether planned or emergency
The sum assured, known as a death benefit, is paid to the nominees or beneficiaries after the insured’s death	The insurer covers the actual medical expenses up to the sum insured
Long-term plan	Short-term plan
Life insurance is, generally, for a fixed term and terminates once the tenure is over	Not fixed; the insured can renew the policy as per his/her need or lifelong
Provides both survival and death benefits	Covers only medical expenses up to the sum insured; doesn’t offer death or survival benefits

How to decide what to choose?

Both health insurance and life insurance policies have their own purposes and benefits. While a health insurance policy covers your medical expenses in case of emergency and planned hospitalisations, a life insurance plan will ensure your family gets financial support in your absence. It all depends on your needs and whether you can afford to pay premiums for both insurance products. Experts recommend opting for both, but if affordability is a concern, you can select a coverage amount that suits your pocket.

Conclusion

Given the benefits of both health insurance and life insurance policies, you can consider having both by comparing different plans online and picking the most suitable one. In fact, both have become a must-have considering the rise in lifestyle diseases and critical illnesses, as well as uncertainties in life.

Disclaimer: The above information is for illustrative purposes only. For more details, please refer to policy wordings and prospectus before concluding the sales.

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