Difference Between Health & Life Insurance [2025 Guide]

Q: What types of life insurance are there?

Level term life insurance Decreasing term life insurance Over 50s life insurance Whole of life insurance

Q: What is health insurance?

Helps to cover the cost of medical expenses Can help to pay for a wide range of treatments, consultations, tests and more Gives you peace of mind that you can benefit from private healthcare when you need it Different policy types available to meet different needs (such as single or family plans)

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Difference between health and life insurance

What is the difference between health insurance and life insurance?
What is life insurance?
What types of life insurance are there?
What is health insurance?
What types of health insurance are there?
What is the cost difference between life and health insurance?
Life insurance or health insurance, which is right for you?
Can I have both life and health insurance cover?
FAQs

What is the difference between health insurance and life insurance?

Health insurance and life insurance can be easily confused, however making sure you understand the difference is essential when deciding what protection is right for you.

Health insurance covers medical expenses due to illness, injury, or preventive care. It helps policyholders manage the costs associated with doctor visits, hospital stays, surgeries and prescription medications.

In contrast, life insurance is designed to provide financial support to loved ones in the event of your death. It can help to cover costs such as funeral expenses, pay off debts and provide ongoing financial stability for loved ones.

Whether you’re looking to protect yourself from unexpected medical expenses or ensure your loved ones are financially secure in your absence, knowing the distinctions between these two types of insurance is the first step toward achieving the right coverage.

At Reassured, we don't currently provide health insurance policies, but we do offer life insurance and can help you compare quotes from leading insurers.

This quick and simple guide breaks down health and life insurance to help you make a well-informed decision.

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What is life insurance?

Life insurance key points:

Pays out a lump sum if you pass away during the policy term
Helps to cover costs such as the mortgage, funeral costs, living expenses and an inheritance
Provides you and your loved ones with peace of mind
Different policy types available to meet different needs
Prices start from 20p-a-day^†

Life insurance is a type of policy that pays out a lump sum to your loved ones if you pass away during the policy term.

It can help to cover key costs such as:

Mortgage or rent payments - The average mortgage debt in the UK is £134,494^[1] and the average cost of rent is £2,700 a month^[2]
Family living costs - UK families spend, on average, £32,500 a year on everyday living expenses including transport, food shops, utilities and council tax^[2]
Outstanding debts - The average debt for UK adults in February 2025 was £8,283 (not including mortgages)^[3] and the average credit card debt per household in 2023 was £2,452^[4]
Childcare and school costs - The average cost of full-time childcare in the UK is £225.70 per week^[5]. Costs associated with primary school can add up to £864.87 per child every year and £1,755.97 per child every year for secondary school^[6]
Funeral costs - A basic funeral costs £4,285 and the total cost of dying, which includes funeral costs and legal fees, is £9,797^[7]

Life insurance can be beneficial for those with dependents to help give peace of mind that living expenses are covered for your loved ones should the worst happen.

What types of life insurance are there?

There are many types of life insurance that cater to different needs. Each type of life insurance policy will also come with its own set of benefits.

Below is a small description of the most popular options:

Level term life insurance

Level term life insurance - provides a fixed pay out amount (sum assured) that lasts for a set amount of time (up to 40 years) and pays out if the policyholder passes away during the term. A popular option for those with an interest only mortgage as the pay out remains the same.

Decreasing term life insurance

Decreasing term life insurance - a type of policy where your pay out amount will reduce over time. This policy could last up to 40 years, ideal for those with a repayment mortgage. Usually one of the cheapest types of life insurance.

Over 50s life insurance

Over 50s life insurance - a policy available to UK residents aged 50 - 85, offering guaranteed acceptance. It’s a popular option for those in this age group with pre-existing medical conditions as no medical information is needed. Once in place, a policy will cover you for the rest of your life with a guaranteed pay out (after the waiting period has passed).

Whole of life insurance

Whole of life insurance - a type of policy that lasts for your entire life, providing a pay out when you pass away (not if). It offers a larger pay out than over 50s life insurance (up to £1,000,000) but can be more expensive due to taking medical history into account when applying and requiring premiums to be paid for the rest of your life.

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What is health insurance?

Health insurance key points:

Helps to cover the cost of medical expenses
Can help to pay for a wide range of treatments, consultations, tests and more
Gives you peace of mind that you can benefit from private healthcare when you need it
Different policy types available to meet different needs (such as single or family plans)

Health insurance is a type of cover that provides coverage for private healthcare expenses, it includes a variety of healthcare services and access to numerous providers.

Health insurance can help you to bypass NHS waiting times and give you access to special treatment, such as:

In-patient and outpatient treatments
Specialist consultations
Diagnostic tests
Hospital stays (after surgery stays)
Mental health support

What types of health insurance are there?

There are different types of health insurance policies available to suit different needs. These include:

Individual policies

Covers one person and is tailored to specific healthcare needs. Ideal for those looking for personalised cover options. This can include access to private hospitals, treatments and specialists.

Family policies

Covers family members all under one plan. It’s a cost-effective way to ensure everyone in your household has access to private health care if needed. Includes shared benefits that enhance its value and convenience.

Corporate policies (or group)

This can be offered by employers as a workplace benefit, corporate cover covers its employees and, in some cases, their families too. These plans are sometimes subsidised, making it affordable while providing cover.

Specialist policies

Designed to focus on specific needs such as mental health or certain pre-existing medical conditions. This can offer additional support, dental care or maternity services. These policies are ideal for people seeking extra cover for certain areas of care.

International policies

This cover can provide access to healthcare in multiple countries. It’s especially useful for frequent travellers or expatriates who need global coverage.

What is the cost difference between life and health insurance?

Premium costs for both health and life insurance are dependent on the individual applicant and are usually influenced by:

Age
Health & lifestyle
Smoking status & alcohol consumption
Occupation & hobbies
Type of policy
Cover amount
Policy length

The underwriting process will calculate the level of risk you pose to the insurer and your premiums will be priced to match this.

The cost of health insurance can also vary by location; depending on where you live, certain areas can have higher medical costs.

Reassured don’t offer health insurance, however, here are some pricing examples from leading provider, Bupa^[9]:

Policy type	Health insurance
Single policy (25 year old, living outside of London and doesn’t smoke)	Around £50
Couple policy (aged 30 - 40 years old and don’t smoke)	Around £110
Family policy (2 adults in their 50’s and two teenage children)	Around £220

Below are some life insurance price examples from our award-winning broker service.

The table below shows example costs of a level term life insurance policy. Quotes are based on a non-smoker, in good health, with a 20-year term and £150,000 of cover:

Age	Premium costs
20	£3.83
25	£4.62
30	£5.76
35	£8.21
40	£11.33
45	£16.74
50	£27.60

Life insurance arranged through Reassured starts from just 20p-a-day. Although, the exact monthly cost will depend on your individual circumstances.

Life insurance or health insurance, which is right for you?

Making the choice on the right insurance is down to your personal needs and circumstances. Some things to consider when exploring both options are:

	Health insurance	Life insurance
Designed to	Cover medical expenses	Provide a pay out to loved ones if you die during the policy term
What it covers	Hospital stays, surgery, consultations	The lump sum payment can help to cover outgoings for loved ones
Beneficiary	Policyholder	Family/dependants
Pays out	For medical treatments	Upon your passing
Cost of cover	Starting from £50 per month^[9]	Starting from £5 a month with Reassured
Benefits	Access to private specialists and faster treatment	Terminal illness cover, option to add critical illness cover (for an additional cost), flexible cover

Find out more about what life insurance can offer by speaking with one of our friendly professionals today.

Can I have both life and health insurance cover?

Yes, it’s common for people to choose to have both types of insurance as they cover different needs.

Life insurance provides a financial security safety net for your loved ones, helping to cover costs after your passing and health insurance ensures you have access to private medical care when you need it.

Having both options ensures your current and future health needs are taken care of as the future is unpredictable.

It's wise to think about your own wellbeing and your loved ones in case you ever become ill or face unexpected circumstances.

How to secure health and life insurance

Securing either policy can be straightforward, but it's essential to thoroughly explore your options to ensure you find the best coverage for your needs.

While you cannot secure both types of insurance together in one policy, the steps leading up to the application process are quite similar.

Investing time in researching and comparing various policies will help you to make informed choices and ultimately allow you to secure the right protection. It's wise to explore different avenues and shop around.

You can compare quotes through:

Insurance brokers
Insurance providers
Comparison websites

When applying for insurance, honesty your personal circumstances is vital, as these factors can influence your premium costs and eligibility. Understanding your options and deciding what’s best for your needs is essential for getting effective coverage.

At Reassured, we provide two ways of securing cover; buying online or via the phone. Why not get in touch in the way that works best for you?

Whilst we can’t help you secure health insurance here at Reassured, we can help you explore your life insurance options. Find out how much life insurance you may need to suit your needs by using our handy calculator:

Life insurance calculator

Calculate how much life insurance you may need by filling in the costs you’d like your policy to cover.

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FAQs:

Is critical illness cover the same as health insurance?

No, critical illness cover and health insurance aren’t the same.

Critical illness cover is typically added to a life insurance policy for an additional cost. Alternatively, it can be bought as a standalone policy through some insurers.

It provides a lump sum pay out if you’re diagnosed with a serious illness, such as cancer or a heart attack.

Having critical illness cover can complement both, health and life insurance, as an additional safety net.

Below are some similarities and differences between the two policies:

Similarities

Health related focus - Both could provide financial protection in the event of health-related issues
Risk mitigation - They help reduce financial burden in some medical emergencies
Premiums - Regular monthly payments are made
Customisable - Both policies can be tailored to your needs
Claim based pay out - Each require a specific condition/event to allow a pay out to take place

Differences

Purpose - Critical illness cover provides a lump sum pay out if you have a severe illness and health insurance covers medical expenses
Usage - With critical illness cover, funds can be used for anything. Whereas health insurance can only cover medical costs
Conditions covered - Health insurance covers a range of conditions, whilst critical illness cover only covers what’s listed in the policy
Pay out model - Critical illness cover is a one-time lump sum payment whilst health insurance reimburses or directly pays medical bills
Preventative care - Critical illness cover doesn’t cover routine check-ups or minor illness, whilst health insurance can cover care such as screenings

Reassured offer life insurance with critical illness cover from just 33p-a-day^º, so why not get in touch and get your free quotes today?

Does life insurance cover health insurance?

No, life insurance and health insurance are two separate products designed for different purposes.

Life insurance provides a pay out when you pass away whereas health insurance is in place to cover the cost of private medical care.

If you’re looking for both types of protection, it could be worth looking into securing separate policies to make sure your needs are met.

Does having health insurance affect my life insurance?

No, health insurance and life insurance are two separate policies that won’t impact each other.

Although, when applying for life insurance, your health (pre-existing medical conditions) and your medical history can influence your premium costs.

Therefore, having health insurance could help manage your health, which may in the long term benefit your application for life cover.

Secure life insurance through Reassured

Whilst we don’t offer health insurance, we do offer a range of life insurance options tailored to meet a variety of needs. To find the best deal for you, comparing quotes is crucial.

Our award-winning brokerage can help you in comparing quotes from some of the top life insurance providers in the UK.

We also provide all the information you need to help you make an informed choice for your family’s future.

Our fee-free quotes start as low as 20p a day, we’ve already arranged life insurance for over 1 million families across the UK.

Why not get in touch today to take the first steps in safeguarding your loved one’s future?

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