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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.
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.
Frequently asked questions
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.
Indeed, it is. Both life and health insurance serve different but very important purposes.
The IRDA of India regulates the insurance market of India.