Should you buy life insurance and health insurance combo plans? MintGenie explores

Life insurance and health insurance are the two main types of insurance policies. Whole life insurance makes sure that your family members are taken care of after your untimely demise, and health insurance policies pay for your hospitalisation and other related expenses.

Recently, some insurance providers have introduced plans that merge life and health insurance benefits, aiming to offer a one-stop solution to policyholders.

In this article, we delve into a few such combined insurance plans, including Max Life’s Secure Earnings & Wellness Advantage Plan (SEWA), HDFC Life’s Click 2 Protect Optima Restore, and PNB MetLife’s Mera Mediclaim Plan, to assess their features.

Key features

Let us first look at some of the common features of these plans.

Comprehensive health coverage: All three plans offer extensive coverage for hospitalisation, surgeries, and other health-related expenses. While some might have a fixed daily cashless compensation, which will depend on the type of surgery, others work like regular health insurance and offer cashless hospitalisation, which will depend on the cost of hospitalisation and other expenses.

Death benefit: Like life insurance plans, these policies offer the nominee or beneficiaries death benefits.

Cashless treatment: Policyholders can get cashless treatments across a network of hospitals in India.

Flexibility in plan options: Each plan provides multiple variants or options to cater to the diverse needs of policyholders.

Add-on benefits: Each plan includes additional benefits, enhancing the core coverage. These can range from wellness programs to multiplier benefits.

Guaranteed returns/benefits: These plans offer maturity benefits as well as add-on benefits after deducting the total withdrawals. 

Tax benefits: Policyholders can get tax benefits on the premiums paid under Sections 80C and 80D and the benefits received under section 10(10D) of the Income Tax Act.

Loyalty and wellness programs: Loyalty additions or boosters are provided based on the policy’s tenure and the policyholder’s adherence to a healthy lifestyle.

Should you invest in these plans?

Next, we will look at some features to understand if these plans are better than traditional life and health insurance plans.

Sum Assured: The maximum sum assured of these plans ranges between ₹10 to 50 lakhs. If we compare it to traditional term insurance plans, the maximum sum assured on these plans might not be adequate.

However, the added death and health benefits can supplement existing life and health insurance plans.

Wealth generation: Term insurance doesn’t offer wealth generation, and health insurance takes care of the hospitalisation and other expenses. However, these plans offer maturity benefits and income options.

For instance, let us check out the Mera Mediclaim Plan.

The plan provides a fixed income option where the policyholder receives a monthly income for 10 years. On the other hand, in the case of the increasing income option, you’ll receive an increasing monthly income for 10 years. The income amount typically rises gradually over time, helping you cope with potential inflation and increased living costs.

In the Click2Protect Optima Restore plan, policyholders get income payouts from age 60 onwards under the Income Plus Option.

In the case of SEWA, it offers guaranteed returns payable as a lump sum at maturity, which can be considered a form of wealth creation. The plan also provides multiple boosters to increase returns, such as loyalty additions, wellness boosters and savings boosters.

Maturity benefits: Health insurance policies typically do not return the premium paid if no claim is made during the policy term. The premiums are utilised to cover the costs of claims made by other policyholders. Some insurers offer discounts on premiums if the policy is claimed during the year.

In the case of term insurance, you can get the premium back if you opt for a return on-premium plan.

However, if you don’t claim in these plans, you can get your premiums back along with the benefits accrued during the policy period. The total amount and benefits will depend on the selected option.

For instance, Mera Mediclaim offers maturity benefits for customers who have chosen ‘with Return of Premiums’.

Premium: Premiums depend on various factors such as age, sex and lifestyle habits. However, the premium of term insurance in most cases is the lowest as it solely focuses on providing life cover. Term insurance plans without return of premiums have the lowest premiums.

On the other hand, these plans offer life and health insurance coverage. Hence, the premium of these plans might be higher than a traditional term life insurance plan.

Premium payment and tenure: In the case of term insurance, you have the option to continue paying premiums till the end of your policy period, say till you reach 60 or pay for a limited period and enjoy the benefits. However, these policies mature after a certain period, and you won’t be able to get the death benefits after maturity.

In conclusion, although these plans offer life and health insurance benefits, they can’t be considered substitutes for pure-term plans or health insurance plans. It can be considered as a plan to complement your life and health insurance plan.

For instance, most term insurance plans don’t have a cap on the maximum sum assured, while most plans offering life and health benefits have a maximum sum assured. So, it might not provide adequate death benefits.

Talk to your financial advisor/registered insurance agent before buying insurance plans.

Padmaja Choudhury is a freelance financial content writer. With around six years of total experience, mutual funds and personal finance are her focus areas.