Difference between Health and Life Insurance

Why do people need both health and life insurance? Are they not the same thing? No, they are not. They both cover someone in the event of something unforeseen happening. That is where there similarities end – the list of differences is much longer.
Definition
Before getting into what each insurance type covers, it is good to know the basic understanding of each.
Life: this covers the risk the death; long-term possibilities
Health: this covers the risk of life; short-term possibilities
Yes, this can be confusing because life insurance should cover the risks of life, but unfortunately it did not turn out that.
Life
There different types of life insurance one can get. Understanding each different type is very important when trying to determine which insurance would be best for you.
Term: This means exactly what it says. It is for a certain amount of time or ‘term’, that being 1 – 30 years. If the insurer were to die in this allotted time, then the beneficiaries would be paid a certain amount. There a two different ways to pay for this coverage. Either pay a monthly premium – the payment remains the same every month – or during the span of the policy the benefit decreases, either monthly or annually. 
Whole: This coverage is lifelong coverage. Premiums are paid every month – noticeable higher than term insurance per month. This coverage uses cash value which is an investment-like product. Investopedia explains it like this, “The policyholder can use the cash value for many purposes, such as a source of loans, as a source of cash, or to pay policy premiums.” There is also a death benefit which is paid to the beneficiary when the insured dies.
Health
This insurance helps cover medical expenses. This type of insurance can be offered by employers to try and attract better employees. Different levels of care determine the cost of coverage. There are a network of designated health providers the insured can choose from, and if they so choose one outside of the network, the coverage will be higher cost. This can also happen without authorization of certain services. 
 
Benefits
Life:  

• Provides financial benefit in event of insured’s death
• Death benefits are income tax-free
• Whole life - Cash value grows during insured’s lifetime

Health:

• All plans cover services
• Some plans have reduced prices and benefits
• Pay a lower price than without insurance

From all of us at Keystone-Deibler, Straub & Troutman Insurance, we would like thank you for your continued business and the opportunity to serve you!