Life insurance is a financial tool in which the policyholder pays a monthly premium for a benefit amount that is paid upon death.
While life insurance can provide some benefits for the policyholder while living, the primary draw is for surviving loved ones to help cover living expenses in your absence.
This type of insurance offers much more flexibility when compared to something like health insurance, where there is no specific coverage and is subject to insurance company approval.
Health insurance is a way for individuals to pay for their medical needs. The extent to which a health insurance policy will cover depends on the insurer and plan purchased. However, it is designed to protect the policyholder, making both everyday medical expenses like a checkup and preventive care, as well as severe illness treatment, more affordable.
When it comes to deciding whether health insurance is necessary or not, it's important to keep in mind what out-of-pocket costs look like.
What is thousands of dollars without insurance can be as affordable as $10 with an insurance policy for certain hospital treatments. With or without life insurance, the reality is that healthcare is expensive, and both the insured and uninsured can accrue medical-related debt.
Life insurance and health insurance aren't interchangeable. Rather, they both offer a specific benefit for your well-being and financial health. If you're trying to decide between one option or another, keep in mind that life insurance is an optional tool, while health insurance is more of a requirement.
Though life insurance is a valuable tool, it's often one that people wait on until they're financially able to support the premium payments in addition to necessary tools like health insurance.