Life Insurance or Health Insurance, Which Should Come First?

Life Insurance or Health Insurance, Which Should Come First?

Life insurance and health insurance are two different products. But there are still people who think that the two products are the same product. However, both are very important for self-protection from various risks. For those of you who are confused which one to buy first, between life or health insurance, see the instructions below.

The Definition Of Health Insurance and Life Insurance

Health insurance is an insurance product that provides cost coverage when the policyholder experiences health problems (illness and/or accident). Health insurance will usually cover hospital costs (hospitalization, doctors, drugs, and procedures) to operating costs based on the conditions stated in the policy.

Meanwhile, life insurance is insurance that covers financial losses if the customer dies. The amount of dependents given by the insurance to the heirs of the customer depends on the amount of premium paid by the customer.

For example, if a life insurance customer dies due to an accident, the insurance company will provide a certain amount of funds, in this case called the sum assured, which can later be used by the heirs (eg wife/husband, children, or parents).

What you need to pay attention to when buying insurance is that the younger you are, the cheaper the premiums will be. Not only the issue of premiums, the older you are when you take out insurance, the benefits you receive will also be adjusted based on the risk of disease that may arise as you get older.

Differences in Life and Health Insurance Based on the Definition

Basically, life insurance provides protection against risks that occur if the insured dies. When the insured dies, the heirs appointed in the policy will receive the sum insured. The amount of the sum insured depends on the premium and the period of payment.

Health insurance is a product that provides protection against risks when the policyholder requires health care. The insurance company will provide reimbursement of medical expenses as stated on the policy. Some of the risks covered by health insurance are outpatient and inpatient costs. 

The Difference Between Life and Health Insurance

Judging from the understanding, in fact these two insurances both have the insured in the form of a personal self and not an object. However, there are visible differences between the two when viewed from various sides. The following are the differences between life and health insurance.

1. Risk Insured

In life insurance, the company will provide coverage if there is some risk to the insured. Claims can be made if the policyholder dies or suffers permanent disability due to an accident. It is hoped that with life insurance, the family's financial condition will be maintained even though the source of income is cut off.

As for health insurance, benefits will be provided by the company when the policyholder requires health care. The cause can be due to illness or accident. The risk borne is in the form of costs incurred while in the hospital. However, customers need to understand the policy in order to know what costs are borne by the insurance company.

2. Claim Process

In life insurance, if there is a risk of death, it is the heirs who make the claim. The procedure is to submit a claim document with a policy to the insurance company. After verification and approval, the company will pay the claim to the heirs.

The difference between life and health insurance in terms of the claim process is the system. Because it is a reimbursement of health costs, the claim payment system can be done in two ways depending on the type of health insurance. Two health insurance claim systems are reimbursed and cashless.

In health insurance that uses a reimbursement system, claim payments are given to policyholders as reimbursement for medical expenses. As for cashless insurance, claims will be paid directly to the hospital where the policyholder is being treated.

3. Beneficiaries

Judging from the beneficiaries, there is a difference between life and health insurance. In life insurance, those who receive benefits in the form of claim payments if the policyholder dies are the heirs. So, life insurance provides financial protection guarantees for the heirs left behind.

As for health insurance, the beneficiaries are the policyholders themselves. This is due to insurance coverage which is compensation for medical expenses. So health insurance provides coverage to the policyholder's personal self and not to the heirs.

As difference life insurance and health insurance by benefit and purpose

Basically, the insurance benefit is as protection in the form of sum assured paid by the insurer in the event of a claim for the risk borne in accordance with the agreement.

From the customer's perspective, financial conditions remain stable if unwanted risks befall themselves or their families.

The protection also varies according to the type of insurance owned. It can be in the form of protection for assets in the form of houses and vehicles or it can also be financial protection for heirs if the customer dies.

Broadly speaking, the difference between life and health insurance lies in the extent of the coverage or benefits provided by the two types of insurance.

Life insurance benefits

In life insurance, the guarantee benefits obtained by customers include :

3 Differences in Life and Health Insurance that You Need to Know

  • Die
  • Old age savings
  • Permanent disability or loss of work due to disability due to an accident at work

Health insurance benefits

While in health insurance, the benefits obtained include :

  • Outpatient functions, such as general or specialist consultations, drug prescriptions, preventive measures, doctor fees, laboratory fees, drug costs, doctor-suggested aids. In this case the insurance company provides a maximum limit for the use of funds each year to customers.
  • Inpatient functions, such as delivery, operating room, hospital fees, emergency services, doctor on duty, and so on.
  • For the record, usually each insurance company has its own policy in determining the cost of room rental per day and the class of room provided to customers in accordance with the premium cost agreed in the policy.

So in essence, someone who wants to have life insurance aims to protect his family from the risk of losing income.

While someone who wants to have health insurance aims to avoid himself or his family from the burden of expensive treatment costs at the hospital. 

The difference Between Life and Health Insurance in Terms of Claims

The difference between life and health insurance is not only about the benefits and protection provided. However, business claims between life insurance and health insurance are also different. Here are the differences between the two.

Life insurance claim

As is well known, life insurance covers financial losses if the policyholder has an accident or faces death.

Financial losses are paid to the policyholder himself in the event of an accident or to his heirs to obtain coverage for the event.

However, to get the coverage, the policyholder or heir must report the condition. The following are the steps for submitting a life insurance claim.
  • Request a claim form and a doctor's certificate form from customer service.
  • Complete the claim form and prepare other documents.
  • Submit the forms and supporting documents to the insurance company.
  • Insurance companies verify data.
If the data is complete, the insurance company performs an analysis of the claims submitted. If the claim is rejected, the insurance company will send a rejection letter to the customer. If the claim is approved, the insurance company pays the claim.

Health insurance claim

The product of health insurance is a guarantee when the policy holder is admitted to the hospital by being given reimbursement for hospital costs and medicines.

Health insurance provides two options for claiming methods, namely the reimbursement and cashless system. Both are different in terms of payment. The following is the flow of payment of health insurance claims.
  • Reimbursement system
  • Participants are free to choose any hospital or clinic.
  • Participants received medical treatment.
  • Participants pay the medical expenses and request the necessary documents to the hospital or clinic.
  • Participants send claim documents to the insurance company no later than 30 days from the end of treatment.
  • Insurance companies process claims that have met the requirements usually within 7 working days after the documents arrive at the insurance headquarters.
Those are some considerations for choosing life or health insurance. Hopefully this information is useful for you and good luck.
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