Health insurance is designed to protect you against having to pay large medical bills by offering coverage for a range of medical procedures and treatments. By contrast, is primarily designed to pay out a lump sum in the event of your death.
is typically purchased in one of two forms.
The simplest form of . Also the least expensive, is term which pays out only on your death. You can usually purchase term for as little as one year or for up to 30 years and the policy will only pay out if you die before the policy reaches its end date. You may consider purchasing term later in life or when you feel that your life is likely to be at greater risk over a short period of time for some reason.
The second form of is whole which is a combination of both a term policy and an investment plan. Your monthly (or annual) premiums are divided between the two parts of the policy, with one part of the premium providing you with insurance cover should you die during the period of the policy and the reminder being paid into an investment vehicle, such as a mutual fund or stocks and bonds. Whole is a popular choice as it provides you with both protection for your family and a savings vehicle, possibly to meet college tuition fees or to add to retirement funds. These policies are however normally heavily loaded with both fees and responsibilities and, if you're looking at a whole life policy principally as an investment vehicle, then there are certainly better options available to you.
The cost of both a policy and a health insurance policy depend to a large extent upon your age and health and the younger and healthier you're the cheaper they'll be.
Perhaps the most important thing to understand is that and health insurance are designed to cover two very different situations and it's not a case of choosing one or the other, as many people think. it's a case of deciding as two separate issues whether you need either or both.