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Life insurance vs. health insurance

If you have a family to look after, you might need both.

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Health insurance can help cover the short term by paying for immediate medical bills and health expenses. Life insurance, on the other hand, offers long term coverage and can help financially protect you and your family in the event of debilitating illness or death.

Life insurance vs. health insurance

Health insurance protects you financially if you get sick or injured. Life insurance protects your loved ones financially if you pass away. Some life insurance policies can also provide additional financial protection for you and your family if you get sick or injured by paying you a lump sum to cover what health insurance won’t.

Life insurance Health insurance
Definition An insurance policy that covers specified life events, such as death, disability and serious illness or injury. An insurance policy that covers medical appointments, procedures, prescriptions and hospitalizations.
Who gets paid? Payments are made directly to the policyholder. Payments are made directly to medical professionals for services or prescriptions.
When do they get paid? After the specified event takes place. For example, term life insurance pays out upon death, and critical illness insurance pays out upon diagnosis. After billing for a medical appointment, procedure, prescription or hospitalization.
How much do they get paid? The amount listed in the policy. As much as is required to pay medical costs, minus any deductibles and copays listed in the policy.
What can the money be used for? Anything — there are no stipulations on how funds can be used. Medical bills.

Compare life insurance rates

Compare quotes for life insurance policies starting at $15/month.
How do these quotes work?

Life insurance

Life insurance provides a lump sum benefit in the event of the policy owner’s death or if diagnosed with a terminal illness and not expected to live for longer than 12 months. This lump-sum benefit ensures that the policy owner is able to meet their financial obligations without leaving any financial burden behind to their friends or family. It can also help your family pay for any expenses after you pass, including mortgage payments, school and day-to-day needs.

Critical illness insurance

A critical illness insurance policy can be added onto or bundled with traditional life insurance. It can provide a lump sum benefit in the event that the insured suffers a condition such as stroke, cancer or heart attack. While health insurance can provide assistance in covering some medical and hospital expenses, life insurance with critical illness benefits will help cover financial obligations that you could face after being forced out of work, such as:

  • Equipment for rehabilitation
  • Nursing care
  • Home or car modifications
  • Keeping up with debts and bills

Health insurance

Health insurance pays doctors and hospitals directly for medical costs — it doesn’t pay you for any financial hardship. Depending on your policy, your health insurance may cover:

  • Doctor’s appointments
  • Prescription medications
  • Home nurse care
  • Hospital expenses
  • Ambulance services
  • Overseas medical costs
  • Physical therapy
  • Chiropractic treatment
  • Dental and vision care
Protect your loved ones
Compare affordable quotes from 12+ A-rated life insurance companies side-by-side.

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Compare life insurance policies

Name Product Issue age Minimum Coverage Maximum Coverage Term Lengths Medical Exam Required
Prudential
18 - 75 years old
$100,000
$10,000,000
10, 15, 20, 30 years
Yes
Customize your term life insurance with a long list of life and disability riders. Get a free quote on Policygenius.
Transamerica
18 - 75 years old
$25,000
$10,000,000
10, 15, 20, 25, 30 years
Depends on policy
Purchase a policy worth anywhere from $25,000 to $10 million, with the option to skip the medical exam. Get a free quote on Policygenius.
MassMutual
18 - 80 years old
$2,000
$10,000,000
10, 15, 20, 25, 30 years
Depends on policy
Purchase term life insurance up to age 80 with Finder's #1 ranked company. Get a free quote from this A+ rated insurer on Policygenius.
AIG
AIG
20 - 85 years old
$5,000
$2,000,000
10, 15, 20, 25, 30, 35 years
Yes
Buy term life insurance all the way up to age 85, and choose a policy that lasts up to an incredible 35 years. Get a free quote on Policygenius.
John Hancock
18 - 65 years old
$25,000
$1,000,000
10, 15, 20 years
Depends on policy
Score a low rate on term life insurance with discounts and rewards for your healthy habits. Get a free quote on Policygenius.
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Do I need a life insurance policy if I have health insurance?

Yes. Life insurance covers you in a completely different way, and you need both to be fully financially protected. Life insurance can provide coverage for:

Term or whole life insurance
  • Your child’s education
  • Buying a new house or paying off a mortgage
  • Paying off your credit card debt
  • Day-to-day expenses after the loss of your income
Critical illness or disability insurance
  • Ongoing medical expenses not covered by health insurance
  • Hiring a caretaker
  • Modifications to your home
  • Recovery costs

Bottom line

While health insurance can cover immediate hospital and medical expenses, it will not provide support for your mortgage, school expenses for your children, food, rent, clothing and any other expense that will need to be taken care of. A life insurance policy can protect your loved ones from the loss of your income.

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