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    Life Insurance vs Health Insurance: What’s the Difference?

    6 mins

    Knowing the difference between life insurance vs. health insurance is important for consumers who want to make sure that they have monetary coverage for their medical expenses, as well as monetary compensation to pay out to their family should they pass away. 

    Essentially, health insurance provides recipients with partial or full coverage for medical services or treatment that they undergo. Life insurance is purchased by individuals who want to provide their loved ones with monetary benefits when the insured passes away. 

    So let’s further our understanding of health insurance vs. life insurance.

    Who Needs Health Insurance?

    Everyone can benefit from having health insurance. Health insurance coverage provides you with the ability to seek medical care, obtain treatments, and purchase pharmaceuticals deemed necessary by your doctor. Medical costs without health insurance can be extremely high. 

    In the U.S., the average cost for an emergency room visit is $530, according to a recent study. However, a trip that requires an overnight stay can result in an expenditure of thousands of dollars.  

    Having health insurance can help to mitigate these costs — and while your visit may not be entirely covered by your plan, your out-of-pocket expenses may be reduced.

    What Benefits Are Offered Through Health Insurance?

    There are a number of benefits offered through health insurance plans (however, benefits may vary depending on your plan). These typically include:

    • Outpatient care

    • Trips to the emergency room

    • Treatment in the hospital for inpatient care

    • Care before and after your baby is born

    • Mental health and substance use disorder services

    • Prescription drugs

    • Services to help you recover from disabilities or chronic conditions

    • Lab tests

    • Pediatric services

    While most health insurance plans don’t fully cover all of the costs of your treatment, they will cover a significant portion. This coverage is especially helpful in cases where something catastrophic happens and you need emergency care. 

    What Are the Costs of Health Insurance?

    According to a recent survey, the average cost for a health insurance plan was $452 per month. However, the cost of coverage can vary depending on who you are covering, whether you obtain coverage through your employer and the benefits that you choose to have associated with your plan. 

    Typically, plans with the most coverage will cost more, while so-called “catastrophic” plans will be significantly less. 

    Who Needs Life Insurance?

    Most people can benefit from having life insurance, especially if they have children or spouses who will need the financial support associated with life insurance benefits. 

    Even if you are single and have no one who would need your financial support, you can have a basic plan to cover funeral costs and any costs associated with closing your estate when you pass on. 

    There are different types of life insurance. The two most common are term and whole life plans.

    Term Life Insurance

    Term life insurance typically lasts for a set amount of time, such as 20 or 30 years. Once the term ends, your coverage ends. However, you may be able to extend your policy for a longer time if needed. This type of policy does not have a cash value, and it exclusively pays monies to your beneficiaries in the case of your death.

    Whole Life Insurance

    A whole life policy is usually more expensive than a term policy. As you make your monthly payments, the cash value associated with your policy also builds. Once your policy has gathered a certain amount of cash value, some you can borrow from and use for supplementary income purposes or to help cover the cost of a significant expense.

    What Benefits Are Offered Through Life Insurance?

    Life insurance is used to pay your beneficiaries in the case of your death. It can help to cover expenses such as:

    • Funeral and burial costs

    • Estate settlement costs

    • Outstanding bills for healthcare

    • Health insurance

    • Mortgage or rent

    • Household upkeep expenses

    • Credit card debt

    • Car loans

    • Property taxes

    • Outstanding tax bills

    • Groceries

    • Utilities

    • Tuition for your children

    Generally, life insurance benefits are used to provide your loved ones with a source of income upon your death. They can also be used to support charitable giving causes or houses of worship should you choose to do so.

    What Is the Cost of Life Insurance?

    Life insurance can be less expensive than health insurance. However, costs vary according to a variety of factors, including your age, general health, and any pre-existing health conditions. 

    The amount of benefits that you have coverage for will also factor into your overall cost. According to Bestow, estimated term life insurance premiums can range from $21.83 per month for 25-year-olds to $60.17 per month for 45-year-olds. However, these estimates are based on healthy female non-smoking Bestow applicants, so keep in mind that health, age, and lifestyle determine the premium you’ll have.

    How to Get Started With Life Insurance

    Life insurance certainly has many options and can be complicated, however, if you’re just getting started and are looking for a simple, affordable way to get a life insurance policy, there are actually easy, convenient ways to do so.

    Bestow is the leading digital platform for life insurance and provides instant solutions that address the common challenges and frustrations typically found with purchasing life insurance. The user-friendly platform allows you to complete an online application, get a quote in seconds, and results in minutes. Plus, no medical exam is needed.

    Finding the right life insurance policy that fits your needs (and your budget) does not have to be tedious or confusing. Bestow lets you select the criteria you’re looking for in a term life insurance policy and gives you options that meet those requirements, letting you find the right policy in minutes. No need to wait to get coverage either; you get instant coverage upon approval.

    To learn more about Bestow and the options available, get a quote today.

    Life insurance quotes provided by Bestow Agency, LLC dba Bestow Insurance Services in CA, who is the licensed agent. Term Life Insurance Policies offered by Bestow are issued on policy form LS181 and LS182, or state version including all applicable endorsements and riders, by North American Company for Life and Health Insurance®, Administrative Office, One Sammons Plaza, Sioux Falls, SD 57193. Products or issues ages may not be available in all jurisdictions. Limitations or restrictions may apply. Not available in New York. Our application asks about your lifestyle and health to determine eligibility in order to avoid requiring a medical exam.

    Kristina Dinabourgski
    Kristina Dinabourgski
    Has a passion for demystifying benefits 🎉
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