Should I use Email Hosting?

Yes you are correct. You would be limited by the limits BUT that does not mean you can not afford to keep useful mail for X days before you delete them to free space again.

You are switching context again. The problem I was addressing, for which enterprise-class hosting provides a solution is email archiving. You suggested that a person should POP from gmail without deleting from hosting server as a way to archive. That's nonsense. Most legit and established businesses I work with are required to retain email for 2 to 7 years -- ON A SERVER. You won't be able to do that with your method.

See we are discussing a situation where the client has no option to make the service better in as far as making an extra budget is concerned.

That's nonsense. I'm not going to get into my pricing here, but let me just say its a matter of needs not budget. You can even get hosted Exchange 2016 from Microsoft for only $4.00/mo per mailbox. That's less than some hosting. If one needs it and can't scrape together a budget for business-class email hosting then they can't for web hosting either. (Thus, following your logic we should be discussing the merits of free hosting)
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That's nonsense. Most legit and established businesses I work with are required to retain email for 2 to 7 years -- ON A SERVER. You won't be able to do that with your method.

This is easily achieved. I have my main email addresses set up using POP in Windows Live Mail and never use the webmail feature that comes on the server, so for all i get emails in Live mail, they still remain in webmail on the server.

but with webmail it all depends on how big you set the mail boxes in cPanel they have 2 preset Mailbox Quotas of 250mb or Unlimited.

a majority of my clients 250MB is ample for them
 
This is easily achieved. I have my main email addresses set up using POP in Windows Live Mail and never use the webmail feature that comes on the server, so for all i get emails in Live mail, they still remain in webmail on the server.

but with webmail it all depends on how big you set the mail boxes in cPanel they have 2 preset Mailbox Quotas of 250mb or Unlimited.

a majority of my clients 250MB is ample for them

I personally use Outlook and my own free web hosting server email also. But if you have 20 employees, etc that doesn't work; especially, as I have to keep mentioning, there are regulations such as HIPAA or SOX involved; or some sort of collaboration like shared calendars and contacts. There are lot more businesses out there than the one-man company with a website.
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Using hosting and email hosting with the same provider is good as you don't need to update any DNS settings separately.

But drawback of this setup is that if your hosting provider's server goes down then your emails will also stop functioning. So if your business highly relies on emails, then feel free to host emails separately.

Separate email hosting service means emails will be fully managed by your email hosting provider.
 
But drawback of this setup is that if your hosting provider's server goes down then your emails will also stop functioning.

Not really if you chose the right provider.

I have clients who having hosting and email hosting with me. I have a separate server that handles the email hosting and all my servers are clustered together.

so if the server with the hosting goes down then DNS cluster keeps the sites up, but more important clients emails still work.
 
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