Term Insurance vs General Insurance: Which is the ideal one for you

One concept that is very clear for us to build a financially secure & independent future is to invest & avail insurance. Insurance policies vary because each policy is created in order to suffice a particular need. These policies are framed with the mindset of what the policyholder will need. The different types of policies are medical or health insurance, term insurance, general insurance, life insurance, & more. 

In order to help you determine what policy is ideal for you, let us understand what a Term Insurance plan is & what General Insurance is: 

A term insurance plan is an insurance product that provides you coverage, which helps your beneficiaries upon your untimely demise. The term insurance plan provides your family with the benefit that comes with the plan you bought & based on the coverage you have sought. 

Compared to a term insurance plan, general insurance refers to an insurance plan that protects you against everything except life insurance or term insurance. General insurance ensures the safety of your finances from aspects like damage, destruction, natural disasters, theft, health, etc. One has to pay the premium for such policies, select additional riders if any, & when the damage or the liability occurs, your insurance service provider ensures you. 

In an ideal scenario, one should avail of both, i.e.,, a term insurance plan as well as a general insurance plan to have comprehensive health coverage. Here are the reasons why you should buy a term insurance plan & a general insurance plan: 

  • Term Insurance: 

A term insurance plan helps you cover the insurance needs of your family. It can be purchased after substantial planning, which will allow you to get the best policy for you. 

Determine your lifestyle costs & a tenure for which your beneficiaries may use the funds that are received through this policy. This will help you calculate the coverage sum as well as the premium you need to pay for the term insurance plan. 

Apart from the point mentioned above, before availing of the term insurance policy, check for the inflationary reduction in the value of money, & your age. The younger you are, the lower the premiums. 

Term insurance also provides you with some tax benefits on the premium that you are paying. It will not give you any maturity benefit if you outlive the policy’s tenure. 

  • General Insurance: 

In order to understand general insurance here, the insurance coverage can be considered health insurance. In this case, you are paid in the form of a reimbursement or a cashless service for your policy. 

General insurance is beneficial for everyone as the premiums that you pay will be high. However, they will help you save money when an illness comes your way. This ensures that your finances are not hit to the extent of your coverage. 

It would help if you started planning your financial freedom & avail of both of these insurances. One for you & your family’s medical bills & other to secure their future.