Key Differences Between Life Insurance And Medical Insurance

It’s easy to mix up life insurance and medical insurance as they are sometimes bundled under one policy. Knowing the difference between life insurance vs medical insurance can help you make educated decisions about your insurance coverage or determine if you are appropriately insured. In this article, we will delve deeper into the main differences between life and medical insurance.

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What is Life Insurance?

Life insurance is a contract that pays your beneficiaries a death benefit if you die. It can also cover long-term care costs for total & permanent disability. Life insurance helps protect your loved ones against financial loss in the event of your death. Medical insurance, on the other hand, helps pay your medical bills after you become ill or injured.

Benefits of Life Insurance

Life insurance has many benefits. Your beneficiary can use the money to pay off any debts you have, such as a mortgage or student loans, or to cover the costs of a funeral, childcare, or transportation and burial expenses. If your policy has total & permanent disability benefit, you can receive payment in such an event to reduce your financial burden.

Types of Life Insurance

There are many types of life insurance policies available. It’s important to know how they differ from each other and what particular benefits they provide.

Term Life Insurance

This type of life insurance provides coverage during a specific term (such as 10, 15, 20, or 30 years). It provides no cash value and the monthly premium may increase with age. Affordability is a key benefit of this type of life insurance, as they are often less expensive than other types of policies. However, if the covered person outlives the term of the policy, the beneficiaries will not receive a payout. Some term life insurances allow the policyholder to renew it for another term or convert their policy to permanent coverage, but the premiums will usually have to be recalculated to account for the covered person’s older age at the time of renewal. Overall, this is an excellent type of life insurance for anyone looking for short-term coverage and affordability, but it might not be the best option for someone who is looking for long-term protection.

For a plan that offers affordable coverage and flexibility, check out i-FlexCover. Unlike most types of term life insurance, it gives you the flexibility to upgrade/downgrade your plan based on your needs or budget for up to RM150,000 sum assured on death benefit, from premiums as low as RM3.90 per month. Also, age will not affect your premiums! Enjoy the benefits of term life insurance with added flexibility.

Investment-linked Insurance

One key benefit of this type of life insurance is that it is a 2-in-1 policy that combines protection and investment. Its premium depends on age and coverage amount but does not increase with age. It can typically cover up to 100 years old. The cash value is non-guaranteed as it depends on the investment performance of the fund chosen. You can use the cash value that is accumulated over time to pay your premiums or withdraw when faced with an emergency.  There are no cash bonuses or payouts. It’s suitable for those who want to achieve wealth accumulation and protection at the same time.

For an all-in-one investment-linked plan, check out GoProtect Platinum that has life insurance, medical coverage, and investment.

Endowment Insurance

A type of life insurance that also acts as a savings plan. A key benefit of this type of life insurance is that apart from covering the life of the insured, it helps the policyholder to save regularly over a specific period of time. If the policyholder survives the policy term, they will receive a lump sum amount that also includes any additional bonuses. This is good for people who want to stick to a savings plan and have long-term financial goals. The lump sum can be used for retirement or purchases such as a house or a child’s education. Some endowment plans offer a shorter premium commitment for longer-term protection. For example, with Gibraltar BSN Cash Star, the payment term is only 5 years for 20 years of coverage.

Interested in getting a life insurance policy?

Explore Gibraltar BSN’s wide range of life insurance plans here and find an ideal plan for your specific needs and budget.

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What is Medical Insurance?

Medical insurance can help you pay for the cost of medical treatment if you need to go to the hospital or visit the doctor upon getting sick or injured. Many people find it convenient to just get their medical insurance through their employer as part of an employee benefits package. But that can sometimes not be enough to fully cover your medical expenses. Also, Malaysia has high medical inflation. That is why having the benefits of your own medical insurance is crucial for you and your family members.

Benefits of Medical Insurance

One of the key benefits of medical insurance is the ability to cover the cost of medical treatment. It helps you and your family alleviate financial hardships when dealing with unexpected medical costs, such as large medical bills after an accident or illness.

Types of Medical Insurance

While there are many different types of medical insurance, most individuals seeking insurance for unexpected medical expenses can find the coverage they need with medical and hospitalisation.

Medical and Hospitalisation

This type of medical insurance covers the expenses incurred during hospitalisation due to injury or illness. It usually has cashless and hassle-free admissions for the policy’s panel hospitals where you can get treatment without having to pay bills or file claims separately. Some medical insurance provide outpatient benefits such as emergency accidental outpatient treatment.

From only RM5/day, Smart Health Cover takes care of your medical bills and lets you focus on your recovery.

Female-related Insurance

This type of medical insurance covers female-related illnesses such as breast cancer, ovarian cancer, and pregnancy, which are not covered by regular medical insurance. It’s suitable for women as it covers the gender specific health issues that they wouldn’t otherwise get from regular medical insurance.

Lady Plus covers female-related healthcare issues including Female Specified Cancer Treatment and also includes Facial Reconstructive Surgery Benefit.

Interested in getting a medical insurance policy?

A good medical insurance plan can help ensure that you and your family can afford the proper care and medical attention required when life throws its curveballs. Explore Gibraltar BSN’s wide range of affordable medical insurance plans and find one that suits your needs.

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Life Insurance vs Medical Insurance: Why You Should Get Both

Understanding the difference between life and medical insurance contracts can be helpful if you're looking for a way to protect you and your family's financial future. Both have their perks, whether it be coverage for disability, hospitalisation or death. They both complement each other well, and having both will often give you good financial protection. With affordable insurance such as i2u, it is now reasonable to be able to get both.

What’s important is knowing the specifics of the different types of life and medical insurance available and how  they can benefit you and your loved ones. Before signing up for any plan, it’s also worth doing due diligence to be fully aware of how far your coverage extends.

Ready to find the right life insurance or medical insurance suited for you? Have any further questions? Get in touch with our wealth advisors quickly through a simple form submission.