Emergencies don’t knock before arriving. Such situations can throw both emotional and financial lives into chaos, whether it’s a sudden illness or an unforeseen accident. Medical treatments today are expensive. Similarly, the unexpected death of an earning member can leave a family financially stranded.
This is where health and term insurance play a critical role. Having both prepares you for emergencies with a clear action plan and financial support.
How Health Insurance Covers Sudden Medical Expenses?
Health insurance is designed to cover medical costs arising from illnesses, surgeries, or accidents, including expenses related to diagnostic tests and procedures such as those involving CE IVD medical devices. It ensures that an emergency doesn’t drain your savings.
1. Covers Hospitalisation & Treatment Costs
Whether it’s a planned surgery or an emergency admission, a health insurance policy pays for:
- Hospital room rent
- Doctor consultations
- Medicines
- Surgeries
- ICU charges
Policies also cover day-care treatments like dialysis or chemotherapy that do not require overnight stays.
2. Cashless Treatment at Network Hospitals
Most insurers have tie-ups with a network of hospitals for cashless treatment. You only need to show your health card at admission — the insurer directly settles the bill with the hospital.
This feature is extremely helpful in emergencies when quickly arranging funds can be challenging.
3. Additional Benefits for Emergencies
Health plans today come with added benefits that further help during crises:
- Ambulance cover for emergency transport
- Pre- and post-hospitalisation expenses
- Critical illness cover (can be opted as a rider)
- AYUSH treatments for alternative care options
Some plans also cover air ambulance, which can be life-saving in remote areas or accident cases.
4. Tax Savings Under Section 80D
You can also save taxes on the premiums paid. Under Section 80D of the Income Tax Act:
- Individuals can claim up to ₹25,000
- Senior citizens can claim up to ₹50,000
This makes health insurance a wise addition to your financial plan.
Tip: Opt for a higher sum insured with a top-up or super top-up policy if your existing cover is limited.
Why Term Insurance is Necessary for Unexpected Life Events?
While health insurance handles treatment costs, term insurance provides life cover. It ensures your family’s financial stability if the unthinkable happens.
1. Provides Financial Security to Family
If the policyholder passes away during the policy period, term insurance pays the nominee a fixed sum (sum assured). This money can help the family manage:
- Living expenses
- Children’s education
- Loan repayments
- Future financial goals
Unlike health insurance, this is not a reimbursement policy — it provides a lump sum amount that can replace the policyholder’s income.
2. Affordable Premiums with High Coverage
Term plans are the most cost-effective life insurance products. For example, a 30-year-old non-smoker can get ₹1 crore coverage for as low as ₹600–800 per month.
This high sum ensures that your dependents can continue their lives without financial disruption.
3. Customisable with Riders for Extra Protection
You can strengthen your cover with additional riders such as:
- Accidental death benefit
- Critical illness cover
- Disability waiver of premium
- Terminal illness cover
These add-ons ensure you’re protected against multiple risks in one plan.
4. Tax Benefits Under Section 80C and 10(10D)
Premiums paid for term insurance are eligible for tax deductions under Section 80C (up to ₹1.5 lakhs). The nominee’s death benefit is tax-free under Section 10(10D).
These dual benefits make term insurance both protective and tax-saving.
Health Insurance vs Term Insurance: Different But Equally Essential
| Aspect | Health Insurance | Term Insurance |
| Purpose | Covers medical expenses | Offers life cover to dependents |
| Benefit Type | Cashless/reimbursement | Lump sum payout on death |
| Usage | Multiple times during policy | One-time claim by nominee |
| Duration | Usually yearly (renewable) | Long-term (10–40 years) |
| Tax Benefits | Section 80D | Section 80C and 10(10D) |
As shown above, health insurance helps you during life, while term insurance helps your family after your life. Both are non-negotiable if you want to be fully prepared for any emergency.
Why You Must Plan in Advance
Emergencies don’t give warnings. Waiting till you’re older or ill can lead to:
- Higher premiums
- Policy rejections
- Limited coverage
Buying insurance early ensures lower costs and better benefits.
For example:
- A person in their 20s can lock in a ₹50 lakh term plan for a premium of ₹4,000–5,000 annually.
- A health policy can cover lifestyle disorders later in life without extra loading.
Also, many insurers have waiting periods for pre-existing diseases. So buying early ensures faster and wider coverage in the long term.
Emergencies are unpredictable, but your response to them doesn’t have to be. Having health and term insurance gives you the confidence to face any medical or life emergency. Health insurance keeps you financially stable during illness or hospitalisation. Term insurance ensures your family’s life goals are not derailed in your absence. Together, they form the foundation of smart financial planning.