With the rising popularity of unit-linked plans and the increasing awareness about health insurance, a lot of people wonder whether they should invest in both the products. If you are struggling with the same dilemma, this post will help you make the right decision.
The dual benefits of life insurance and investment have made unit-linked plans popular in India. At the same time, the rising healthcare expenses have made health insurance a must for every individual.
But should you purchase a unit-linked plan along with health insurance? Is paying premiums of two insurance policies a sensible thing to do? Let us try to understand unit-linked plans and health plans to decide whether you should purchase both-
What are Unit Linked Insurance Plans?
These are life insurance products that come with an investment component. The premium you pay for such plans is divided into two parts- insurance and investment. The insurance part buys life cover, and the investment part invests your money in a fund selected by you from options like equity, debt, and hybrid funds.
So, in case if the policyholder dies within the policy tenure, the insurer will pay the sum assured of the unit-linked plan to the nominee/beneficiary. If the policyholder survives the tenure, he/she can sell the policy units on maturity.
What are Health Insurance Plans?
The primary goal of a health insurance plan is to protect you against rising healthcare expenses. The policies have a fixed coverage amount, and you will be protected against your healthcare expenses up to this amount.
For instance, if your health policy has coverage of Rs. 5 lakhs, you will be protected against healthcare expenses of up to Rs. 5 lakhs in a year. In case if you fall ill and the treatment cost for the same was Rs. 1 lakh, the health cover for the year will be Rs. 4 lakhs.
Is Purchasing Unit Linked Plan and Health insurance a Smart Decision?
As discussed, the end goals of the unit-linked plan and health insurance are very different. While a unit-linked policy covers your life and offers an investment opportunity, health insurance protects you against healthcare costs. It also means that purchasing a unit-linked plan with health insurance is a wise decision.
If you only purchase a unit-linked plan, your healthcare cost won’t be protected. In an event where you need medical assistance, you will have to bear the expenses from your pocket. Similarly, by only purchasing a health insurance plan, your life will not be covered, and you will risk the financial security of your family in case of your unexpected demise.
Purchasing Health Insurance and Unit Linked Plan
As can be seen above, health insurance and ULIP are two distinct products with different goals. While life insurance is a must for the financial security of your loved ones, health insurance is necessary to protect yourself against the increasing healthcare expenses.
Together, both the products can add more stability to your finances and aid your long-term financial growth while also preparing you and your family against the unexpected.
