Health and Sickness Licences Are Not Life Insurance

Health and sickness licences are income‑protection policies that pay a benefit while you are unable to work due to illness or injury; they do not pay a lump‑sum upon death, which is the defining feature of life insurance.

What a health and sickness licence covers

These policies replace a portion of your salary for a set period when a medical condition prevents you from performing your job. They typically include:

• Daily or weekly benefit amounts based on a percentage of earnings
• Waiting (elimination) periods before payments start
• Maximum benefit duration, often up to 2 years or until retirement

What life insurance covers

Life insurance provides a death benefit to your designated beneficiaries when you pass away, regardless of the cause. It can also include optional riders for terminal or critical illness, but the core product is death‑benefit protection.

Key distinctions

Both products address financial risk, yet they serve opposite events: health/sickness licences mitigate loss of earnings during illness, while life insurance mitigates loss of income for dependents after death. Premiums, underwriting criteria, and tax treatment also differ.

When you might need both

Many households combine a health and sickness licence with term life insurance to cover short‑term income loss and long‑term financial obligations. Evaluating your dependents' needs, debt profile, and employment stability helps decide the appropriate mix.

Typical policy limits