While both life insurance and health insurance provide financial protection, they do so in different ways. Delve deeper into the differences between life insurance and health insurance. Learn how they can provide you with the peace of mind and protection you need.

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What is life insurance?

Life insurance is a great way to protect your family/loved ones in the event of your death. When this happens, the policy pays out a cash lump sum to help them with any financial difficulties they may face.

It can be bought in two ways:

  • As a whole of life policy - like the name suggests, this covers you for the rest of your life.
     
  • As a term life policy - you choose how long the policy covers you for. If you die during this time, the policy pays out, but if you outlive the policy, there is no payout. Generally, this policy is much cheaper than whole of life, since a payout is not guaranteed. 

With a whole life policy, your premiums and payout value remain fixed throughout - unless you opt for a increasing policy. An increasing policy ensures that the amount you are insured for keeps up with inflation. But your monthly premiums will also increase to reflect the new amount of cover. 

With term life insurance, you have 3 options to choose from:

  • Level term - this is the most common option and provides a fixed payout amount over an agreed period of time. Your premiums are also fixed. 
     

  • Increasing term - the payout increases over time to account for inflation, as do the premiums. Your premiums increase with inflation as well. 
     

  • Decreasing term - the payout decreases over time and is often used to cover repayment of debts, such as a mortgage.Your premiums are fixed, but are typically cheaper than level term insurance.

The insurance products offered by Cavendish Online have no cash-in value at any time. If you stop paying your premiums, your cover will stop, your policy will end, and you will receive no benefit. If you have not claimed before the end of your chosen policy term, the policy will end, and no benefit will be paid.

If you are facing financial difficulty, please contact your insurer before cancelling your policy or letting it lapse. They may have options available that means you don't have to lose the plan.

What does life insurance cover?

Life insurance helps to cover the financial cost of death, including the costs associated with funerals and burial expenses that can often add up quickly.

Life insurance policies may also provide benefits to your family/loved ones to help them cope financially. This might include income replacement or educational funds for dependents.

Your family/loved ones can also use the policy to cover mortgage repayments. This can be done through a decreasing term policy, which means that the payout decreases over time, as the mortgage does too.

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What is health insurance?

Health insurance (private medical insurance) covers medical expenses and treatment if you become ill or injured. It can be purchased either privately or through an employer’s group scheme.

Whereas most people seek treatment through the NHS, with health insurance, you can opt to be treated privately. This can allow for faster access to treatments and quicker discharge times. It can also provide access to more comfortable surroundings, such as a private room.

Most healthcare plans will cover some form of patient care. This can include hospital visits, specialist consultations, tests and scans, etc. They can also cover treatments such as counselling, physiotherapy, and some alternative therapies.

What does health insurance cover?

Health insurance plans vary depending on the insurer. Most policies will cover a wide range of private medical services, including:

The main difference between life insurance and health insurance is that life insurance pays out if you die, whereas health insurance can cover medical costs if you become ill or injured.

Life insurance provides financial protection for your family/loved ones in the event of your death, while health insurance provides financial protection for medical bills in the event of illness or injury.

Can I have both health insurance and life insurance?

Yes, it is possible to have both life insurance and health insurance. Many insurers offer them separately so that you can be covered now and after you’re gone. Having both types of insurance provides peace of mind for yourself and your family/loved ones.

When considering the right type of policy, it can be helpful to think about the value they offer in terms of providing protection for your family/loved ones. Life insurance offers a lump sum if you die, while health insurance covers medical expenses.

If you're not sure which type of cover you need, you can speak to one of our advisers. They'll be able to talk you through the different types of insurance available, and help you make an informed decision.

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Give our advisers a call today.

Our team of friendly and professional advisers are on hand to help with any questions you may have regarding Life Insurance.

The advisers can also make recommendations tailored to your current situation and will research the market on your behalf, ensuring you secure the cover you need and supporting you every step of the way. 


01392 43 61 93(Monday to Friday, 9am - 5.30pm)

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