What is the difference between Health, Medical and Life Insurance (India) and Which one I should take my self and which one for my wife?
I want to take insurance for safety + tax saving purpose. What to do need suggestion.
Health & Medical Insurance are same and cover the eventuality incase one gets ill and needs a major surgery/treatment/hospitalization.
Life Insurance on the other hand covers the eventuality of death, where the sum assured goes to the Nominee. The money would be handy for the dependents incase of your untimely death.
One needs to have both the covers. Medical and Life Insurance are covered under different sections for exemptions. For medical one can have upto INR 25,000 rebate for self and dependents. The Life Insurance is covered under 80c upto INR 1,00,000.
Do not buy a life insurance for tax saving, there are other instruments that would suffice your needs. Once typically needs to buy cover of 8 to 10 times you gross annual income. Term plans are the best plans and come very cheap.
As your wife is not working, only a Medical insurance/policy would be sufficient.
Edit: Based on Yishai comment.
One typically ignores Term policy for non-working spouse. However quite a few cases it may mean additional expenses, i.e. if children are small the need for additional house hold help, or the need of a vehicle / driver or may mean the surviving spouse need to cut-down on work time and reduced pay or any such needs have to be evaluated and based on it a term policy for spouse may well be advisable.
Have you considered taking a term insurance? It should be noted that Term Insurance are purely for Life Cover and there are no guaranteed returns. That means your nominee will receive quite a substantial amount in case of your death within the policy period. Otherwise the money is lost.
As per your comment, I believe you are looking into something which will make your family's life secure incase of your untimely death.
The advantage of taking a term insurance is the higher amount your nominee will receive in the case of your death. You can use Critical Illness rider, Permanent Disability rider etc to take care of the different situations.
For eg: A simple LIC policy with 25k yearly premium for a 30 year old person will give a cover of around 5 lakhs in India. You will get returns once the policy period is over.
Incase of term insurance, a 25k yearly premium will ensure a life cover of around 1 crore for a 30 year old person for 20-30 years. There are no returns incase the person is alive after the policy period is over unless some riders are applicable.
SBI Life Insurance also have high claim acceptance percentage. You can check the irda websitelink to find out the insurance company with high claim acceptance ratios and other statistics.