7 Differences Between Life Insurance vs Medical Insurance, Important to Know!

What are the differences between life insurance vs medical insurance? In this uncertain economic situation in Malaysia, you need to make financial planning. This means you need to allocate a portion of your monthly budget for personal and loved ones’ protection as emergency preparedness. One way you can do this is by protecting yourself and your family with life insurance vs medical insurance.

What is Life Insurance vs Medical Insurance?

Life insurance refers to a financial contribution scheme that needs to be paid in a specific amount, either annually or monthly. Essentially, it provides financial benefits to the designated beneficiaries in the event of the contributor’s death.

Therefore, you need to list down the beneficiaries who will receive the benefits after your passing. In simple terms, life insurance helps with the financial aspect of dependents or burdens (such as family members) affected by your death.

However, there are certain exceptions, such as suicide cases that are not eligible for any protection benefits. Medical and health insurance, on the other hand, refers to a financial contribution scheme that needs to be paid on a monthly or annual basis.

Technically, it is similar to life insurance. The difference is that it provides financial benefits to the contributor in the event of injuries or covered illnesses. This means that if the contributor faces any health issues, the costs of treatment and medical expenses will be covered by the insurance company.

However, it depends on the terms and conditions of the insurance policy. Additionally, it is subject to exclusions of certain diseases that are not covered by the insurance. Some insurance companies establish specific conditions regarding the diseases covered by the insurance.

Usually, chronic diseases such as cancer and stroke may require you to make critical illness insurance contributions.

Differences between Life Insurance vs Medical Insurance

Fundamentally, there are distinct differences between life insurance and medical insurance. Understand the details of the differences between life insurance and medical insurance as follows:

	Life Insurance	Medical Insurance
1. Meaning	Provides financial assistance to beneficiaries (dependents) in the event of your death.	Protects policyholders to help cover medical expenses and surgeries in hospitals
2. Types of Coverage Plans	Term Plans, Investment-Linked Plans, Savings Plans, Whole Life Annuities, and others. (Refer to insurance agents or insurance companies for more information on specific insurance types)	Comprehensive Health Insurance Plans, Critical Illness Plans, and others. (Refer to insurance agents or insurance companies for more information on specific insurance types)
3. Insurance Benefits	Allows beneficiaries to continue their lives as usual through the compensation received after their death; Can help pay for funeral expenses, settle existing debts and commitments, education funds for children, and more.	Covers medical treatment costs up to the maximum coverage limit.
4. Payment Method	A lump-sum payment to the beneficiaries in the event of death; If it involves permanent disability, the payment will be made to the policyholder.	The insurance company directly pays for the treatment costs to the hospital.
5. Beneficiaries	In the case of death, the guaranteed money will be paid to the designated beneficiaries in the policy; If the policyholder experiences permanent disability preventing them from working, the guaranteed money will be paid to the policyholder.	Only the policyholder will receive benefits if they require treatment at a hospital.
6. Recommended Target Group	Suitable for all groups – encouraged for individuals who are married and have families.	All groups, including infants and children, are encouraged to have health insurance.
7. Income Tax Exemption	Eligible for income tax exemption of up to RM3,000.	Medical insurance policyholders are eligible for income tax exemption of up to RM3,000.

However, in summary, for life insurance policyholders, the beneficiaries listed in the policy will enjoy financial benefits if the life insurance policyholder passes away. In the case of permanent disability, the policyholder will receive the benefit amount.

On the other hand, for medical insurance policyholders, the financial benefits will be enjoyed by the policyholder when they experience health issues – for medical treatment and healthcare expenses.

Life Insurance vs Medical Insurance: Which One Should You Choose?

Insurance protection, such as life insurance vs medical insurance, plays a crucial role. This is because no one can predict the risks and possibilities that may occur in the future.

Car accidents, injuries, or death can happen at any time. Although insurance plays an important role, many people still do not have it because they believe their existing savings are sufficient to cover costs in the event of accidents or death.

In essence, the question of choosing between life insurance and medical insurance depends entirely on you. You need to consider your financial situation and needs. Basically, you need to have at least one of these insurances because you cannot predict the risks that may occur.

However, it is better if you have both life insurance and medical insurance. This ensures that you have a better and smoother future and life.

To obtain further information and explanations regarding life insurance and medical insurance, visit the Qoala website to schedule an appointment with a Qoala customer service agent. Qoala is an insurance comparison platform that offers a variety of insurance options from several popular insurance companies in Malaysia.