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Life insurance and health insurance both offer important financial protection, but they serve very different purposes. While health insurance can help reduce your out-of-pocket costs for medical care, life insurance pays your designated beneficiaries a death benefit to help provide additional financial support. Aflac offers life insurance policies for individuals and families that can give you added peace of mind in case the unexpected occurs. Here, we break down the key differences between these two common policies.
Table of Contents
Life insurance pays a death benefit to a policyholder’s designated beneficiaries after the policyholder passes away. This payout may be used to pay the deceased’s debts, funeral expenses, or serve as an inheritance for beneficiaries. Aflac offers both whole life insurance and term life insurance policies:
Health insurance is an agreement between an insurer and a consumer in which the insurer agrees to pay some or all of the consumer’s healthcare costs in return for a monthly premium.2 Out of the 92% of Americans who had health insurance in 2023, about 65% had private coverage and 36% had public, government-sponsored coverage plans, according to the United States Census Bureau.3
Each of these policies has nuances in the amount of coverage for certain services, limitations and pre-existing condition exclusions, the deductibles and co-pays you must make out-of-pocket before insurance kicks in, and how you choose doctors and specialists. Generally, after you pay the deductible or co-pay for specific services, the doctor will bill your insurance company for the remaining balance.
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Get StartedAlthough both are forms of added financial protection, there are several significant differences between life insurance and health insurance.
| Life insurance | Health insurance | |
|---|---|---|
| Purpose | End-of-life planning for beneficiaries | Reducing out-of-pocket costs for medical care |
| Payout | Paid to beneficiaries upon policyholder’s death | Paid directly to medical care providers |
| Cost | $26/month on average4 | $486/month on average for the lowest-cost Silver plan on the marketplace5 |
| Claims process | Filed at the end of policyholder’s life | Filed by medical care provider after treatments or services |
| Types of plans | Term life, whole life, universal, and final expense insurance | EPO, HMO, POS, and PPO |
| Rider options | Typically related to the policyholder’s passing | Typically related to medical services |
92% of Americans have health insurance, while just 51% have life insurance.3,6 While health insurance should be a priority due to the high cost of medical care and its importance in prolonging your life, people should also consider life insurance. Having both types of insurance policies can help you receive necessary medical care for reduced out-of-pocket costs and support financial planning for the end of your life and future generations.
Health insurance can help you get the care you need to lead a healthier, more fulfilled life. Life insurance, however, can help you provide for your loved ones after your passing. Both of these insurance policies can be key components of an effective long-term financial planning strategy. With Aflac life insurance, you can provide added peace of mind and a financial safety net for your family members after you pass. To learn more about coverage options and get a quote for life insurance, contact an Aflac agent today.
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Review all the major differences between term and whole life insurance, including costs, coverage, pros & cons.
Let’s explore how these life insurance policies work and the different types of living benefits that may be available to you.
Review all the major differences between term and whole life insurance, including costs, coverage, pros & cons.
Let’s explore how these life insurance policies work and the different types of living benefits that may be available to you.
1 NerdWallet – Term Life vs. Whole Life Insurance: Key Differences and How To Choose. Updated May 29, 2025. Accessed June 18, 2025. https://www.nerdwallet.com/article/insurance/term-vs-whole-life-insurance.
2 Investopedia – Health Insurance: Definition, How It Works. Updated September 20, 2024. Accessed June 18, 2025. https://www.investopedia.com/terms/h/healthinsurance.asp.
3 United States Census Bureau – Health Insurance Coverage in the United States: 2023. Updated September 10, 2024. Accessed June 18, 2025. https://www.census.gov/library/publications/2024/demo/p60-284.html.
4 NerdWallet – Average Life Insurance Rates for June 2025. Updated May 30, 2025. Accessed June 18, 2025. https://www.nerdwallet.com/article/insurance/average-life-insurance-rates..
5 NerdWallet - How Much Is Health Insurance? Updated February 12, 2025. Accessed June 18, 2025. https://www.nerdwallet.com/article/health/how-much-is-health-insurance.
6 Bankrate – Life insurance facts and statistics 2025. Updated January 2, 2025. Accessed June 16, 2025. https://www.bankrate.com/insurance/life-insurance/life-insurance-statistics/.
Content within this article is provided for general informational purposes and is not provided as tax, legal, health, or financial advice for any person or for any specific situation. Employers, employees, and other individuals should contact their own advisers about their situations. For complete details, including availability and costs of Aflac insurance, please contact your local Aflac agent.
Aflac coverage is underwritten by American Family Life Assurance Company of Columbus. In New York, Aflac coverage is underwritten by American Family Life Assurance Company of New York.
Aflac life plans – A68000 series: Term Life Policies: In Arkansas, Idaho, Oklahoma, Oregon, Texas, Pennsylvania & Virginia, Policies: ICC1368200, ICC1368300, ICC1368400. In Delaware, Policies A68200, A68300 & A68400. In New York, Policies NY68200, NY68300 and NY68400. Whole Life Policies: In Arkansas, Idaho, Oklahoma, Oregon, Texas, Pennsylvania & Virginia, Policies: ICC1368100. In Delaware, Policy A68100. In New York, Policy NYR68100. B61000 series: In Arkansas, Idaho, Oklahoma & Virginia, Policies: ICC18B61JWO & ICC18B61JTO. In Delaware, Policies B61JWO, B61JTO. Not available in New York. B60000 series: In Arkansas, Oklahoma & Virginia, Policies: ICC18B60C10, ICC18B60100, ICC18B60200, ICC18B60300, & ICC18B60400. Not available in Delaware. Q60000 series/Whole: In Arkansas & Delaware, Policy Q60100M. In Idaho, Policy Q60100MID. In Oklahoma, Policy Q60100MOK. Not available in Virginia. Q60000 series/Term: In Delaware, Policies Q60200CM. In Arkansas, Idaho, Oklahoma, Policies ICC18Q60200C, ICC18Q60300C, ICC18Q60400C. Not available in Virginia.
Coverage may not be available in all states, including but not limited to DE, ID, NJ, NM, NY, VA or VT. Benefits/premium rates may vary based on state and plan levels. Optional riders may be available at an additional cost. Policies and riders may also contain a waiting period. Refer to the exact policy and rider forms for benefit details, definitions, limitations, and exclusions.
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