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Does Life Insurance Cover Medical Bills?

No, a life insurance policy will not cover medical bills of the policyholder.

A life insurance policy will only issue a pay-out to the beneficiary of the policy in the event of the policyholder’s demise. If you wish that the medical treatment be covered of a policyholder, the policyholder will need to purchase a health insurance plan. There are also other notable differences between life and health insurance.

The only way a life or term insurance plan can cover medical expenses is if the policyholder as opted for a disability or critical illness rider, where the insurance company is obligated to disburse the sum assured in the event that the policyholder is suffering from a disability or critical illness. In such a case, the policyholder can utilize the sum assured to pay for his medical bills. 

Let us look at some of the reasons why a health insurance plan is necessary in today’s day and age, and look at some of the other features and benefits of health insurance apart from it covering the medical bills of the policyholder. 

Should I Buy life insurance or Health Insurance?

The correct answer to this is “Buy both.” Health insurance will ensure that you don’t have to worry about the medical costs and quality of treatment. It will ensure that you can afford the best and state of the art treatment if you have a sizeable health insurance policy. At times, this could actually be the difference between life and death. 

Life insurance ensures that your family is taken care of and looked after you’re gone. All necessary expenses like your children’s education expenses, further studies, daily expenses, and all other expenses can be taken care of from the sum assured.

Top 5 Benefits of a Health Insurance Plan

  1. It will cover medical bills and expenses: As mentioned before, a health insurance plan will provide coverage towards the medical expenses incurred to the policyholder. This is the fundamental feature and benefit of a health insurance policy. Ensure that you choose the correct cover amount of your health insurance policy so that you don’t need to worry about medical expenses and the quality of medical treatment.
  1. Outpatient coverage: A health insurance policy not only provides coverage if the policyholder is admitted to the hospital, it also provides coverage in the event that the policyholder has to utilize outpatient medical care like OPD appointments and day care treatments. Ensure that your policy has an outpatient coverage clause.
  1. Peace of mind: The policyholder and his/her family feel a peace of mind that they are coverage against medical expenses should such unforeseen difficulties arise. This peace of mind is important for the family’s progression and prosperity.
  1. Pre and post hospitalizations covered: A comprehensive health insurance policy will not only cover hospitalization expenses, but it will also extend its coverage to pre-hospitalization and post-hospitalization coverage. Make sure your plan has these benefits.
  1. Widely available: Good quality comprehensive health insurance plans are widely available in the Indian market. The IRDA ensures that the quality of health insurance plans due to the regulation it extends on the industry.

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Frequently asked questions

  • Will my life insurance policy cover my medical expenses?

    No, a life insurance plan is only intended to disburse the sum assured to the benefactor of the policy after the death of the policyholder. A health insurance policy will on the other hand take care of medical expenses of the policyholder.

  • Is it a wise choice to buy both life and health insurance?

    Indeed, it is. Both life and health insurance serve different but very important purposes.

  • Who regulates the insurance market in India?

    The IRDA of India regulates the insurance market of India.

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