Choosing Between Health Insurance and Life Insurance

Choosing Between Health Insurance and Life Insurance

We’re constantly being bombarded with messages about protecting ourselves through health insurance and life insurance. It can get quite confusing as both are there to protect you, and you can have different levels of cover in both. As it happens, Billy Explores has been comparing health insurance and comparing life insurance for years, so knows a bit about it and is here to help with some handy info that can help you understand the differences between both life insurance and health insurance. Of course, then of course it will be even easier to compare life insurance and compare health insurance through Billy Explores (but more about that later).

What is Health Insurance?

Health insurance protects you against unexpected costs associated with illness or medical treatment. You’ll be covered for all or part of certain medical expenses, depending on the level of cover you choose. Within health insurance, you have both hospital cover and extras cover and also the option of individual health insurance cover, or family health insurance cover. Of course, it definitely helps to compare health insurance policies depending on your situation.

What is Health Insurance Hospital Cover?

Hospital cover helps take care of the costs associated with medical treatment in private hospitals. It can be extremely beneficial if you find yourself in hospital for any period of time. Hospital bills can run into the thousands of dollars. With private health insurance hospital cover, you may only need to pay a small excess for your stay.

As a general guide, most health insurance providers have four levels of cover:

Basic Hospital Cover: Receive treatment in a private hospital without being subject to public hospital waiting lists.

Bronze Hospital Cover: The same as basic cover, but you’ll get some added benefits. Each provider will offer slightly different inclusions such as choosing your preferred doctor/specialist. There are, however, minimum treatments that all insurers must offer.

Silver Hospital Cover: Everything from basic and bronze, but more included treatments.

Gold Hospital Cover: The best of the best – you should be covered for any medical expenses that Medicare covers.

What is Health Insurance Extras Cover?

A benefit of health insurance is that you can choose extras cover. It covers smaller medical expenses not covered under your general hospital cover. Likewise to hospital cover, health insurance providers will offer different levels of extras cover, and it will include items such as:

  • Dental treatment
  • Optical (such as glasses or contact lenses)
  • Physiotherapy
  • Medical equipment/appliances
  • Alternative and Natural therapies (acupuncture, naturopathy)
  • Chiropractic treatment
  • Pharmaceuticals not covered by the Pharmaceutical Benefits Scheme
  • Gym memberships and other health programs
  • Psychology

Extra is a great benefit of health insurance, so check out what options our panel of providers has here.

What Are Some Benefits of Health Insurance?

Depending on your policy, private health insurance pays some or all of the costs of:

  • treatment in public or private hospitals as a private patient with the doctor of your choice
  • health services that are not covered under Medicare such as physiotherapy, dental and optical.

Private health insurance might also help you access some hospital services more quickly.

You can also pay less tax by not paying the medicare levy surcharge, and can avoid paying more for cover when you’re older.

What Are Some Disadvantages of Private Health Insurance?

While there are many benefits to private health insurance, there are also some disadvantages. For example, the cost can be quite expensive, especially when you’re feeling you aren’t getting any value for money from your policy (of course, you can always compare health insurance through Billy Explores here to see if you can get a better deal from our panel of providers)! Also, some treatments may be excluded if you end up in hospital as well as you still have to pay any out-of-pocket costs. It pays to check the fine print of your health insurance policy.

What is Life Insurance?

Like health insurance, life insurance has a range of options that can appear quite confusing. But don’t worry – they’re quite easy once you understand them!

‘Death cover’ is another name for life insurance. You can purchase a life insurance policy which will pay an agreed lump-sum should you pass away. Essentially, it is designed to replace the income you would have earned. Therefore if you’re gone, your family can still meet their financial obligations.

The amount of life insurance you purchase will depend on your individual circumstances. If you already own your home, you may need less than someone who still has a mortgage. Likewise if your family has considerable debts or loans, you may want your life insurance to cover those cost in full. Life insurance can give your family the chance to grieve without worrying about how they’re going to pay the bills.

Income Protection

Up to 75% of your income is covered by income protection if you’re injured or unable to work. Income protection is usually paid in monthly instalments. It helps you maintain your financial obligations if you can’t work for a period, hence taking unnecessary pressure off your family.

Total Permanent Disablement (TPD) Insurance

Unlike income protection, TPD insurance is paid in a lump sum. While Income Protection covers part of your income for a specified period, TPD insurance is slightly different. You would receive a payout if you were totally and permanently unable to return to your usual occupation (or any occupation) due to serious illness or injury.

TPD insurance doesn’t cover pre-existing medical conditions, and different insurers will have different rules. Therefore, make sure you understand what you’re covered for before you sign up.

Trauma Insurance

Trauma insurance will give you a lump sum payout if you suffer a serious medical issue. It is separate to TPD cover and income protection. One of the reasons people choose trauma cover is because their health insurance doesn’t cover certain serious illnesses.

As a lump sum payout, you could use it for any of the following:

  • Medical expenses
  • Education for your children
  • Mortgage or rent payments while you’re ill
  • Paying off loans or debts
  • Managing everyday expenses.

Trauma insurance may cover illnesses such as:

  • Cancer
  • Accidents
  • Heart disease
  • Nervous system diseases

Finally, check with your insurer what events they cover. Most insurers list over 50 types of illness that they will pay trauma insurance for.

What Are Some Of The Benefits of Life Insurance?

Obviously there are many benefits to having life insurance, and it is depending on the type of life insurance you purchase. First and foremost is the security you’ll feel with knowing you and your family will be covered financially should the unexpected happen, whether you pass away or cannot work due to an unforeseen event. Also life insurance can be flexible so you can compare life insurance

What Are Some Disadvantages of Life Insurance?

Firstly, the cost can be a disadvantage of life insurance. It can appear quite costly. Figures from KPMG’s Life Insurance Insights show premiums increased 12% over a 12-month period to June, 2021, while the number of lives insured dropped 10%. Overall, the number of policies declined. Of course, this also means you have another excuse to compare life insurance policies through Billy Explores here!

Additionally, your premiums may increase as you get older and can get even more expensive if you have pre-existing medical conditions.

Life vs Health Insurance

So we’ve looked at the benefits of life insurance and the benefits of health insurance, so which one do you choose?

These two insurances can work together in certain situations. For example, you might have a heart attack and are unable to work for some time given a hospital stay and recovery period. With health insurance, your choice of hospital care will be covered, and with income protection insurance your income will covered while you get better, both options with no stress on finances.

Both are really important options to make sure you’re covered in case the unexpected happens, but it all comes down to personal situations and preferences. For example, if you have family health insurance to cover your family health-wise, it’s probably smart to have life insurance for yourself too for additional peace of mind to know your family will be covered should something happen to you. If you have individual health insurance, you probably don’t need death cover per se, but maybe look into TPD insurance to make sure you’re covered in case you can no longer work.

How To Compare Life Insurance and Compare Health Insurance

Hopefully you understand more the benefits of health insurance and benefits of life insurance. So you’ve got a solid understand, Billy Explores can help you compare life insurance and compare health insurance options from our panel of providers! Simply click here and you’ll be able to save time and effort, and explore potential savings from our panel of providers.

  • What is the difference between health insurance and life insurance?

    Health insurance is there to help you with hospital bills and ancillary costs in case you get sick or injured. Life insurance is there to protect you and your family should the unexpected happen. If you die, or have an accident and can no longer work, you will be covered financially from your life insurance payout.

  • Do I need both health insurance and life insurance?

    That is a personal decision. Obviously both health insurance and life insurance are important so you will be secure knowing you are covered in case the unexpected happens. You can save time and effort and compare both health insurance and life insurance through Billy Explores, where you can find the best policies for your needs from our panel of providers.