A cover for the entire family instead of individual plans for each family member, and, that too, at a cheaper premium. Is this worth it? Let’s find out.
Selecting the right Health Insurance plan can be an uphill task, especially when you are trying to ensure that you are covered adequately. The sheer number of policies and riders available are enough to confuse even the most knowledgeable. On top of that, having to choose between individual plans and family floater plans can be quite baffling.
A cover for the entire family instead of individual plans for each family member is available at a lower premium. But is it really the right option for you? Here’s some insight into the big fight – ‘Family Floater versus Individual Health Cover’. We talk about advantages and disadvantages of both, just to be fair.
Overview of plans
An individual health plan, as the name suggests, is a Health Insurance plan that covers a single individual. Suppose you are a family of three – your spouse, your child and yourself – you will need to take individual plans for each member. There would be an annual premium for each of the policies, and depending on the sum assured of the plans, the hospitalisation expense reimbursement will differ.
However, a family floater plan is a single plan that covers all family members. Instead of having three individual health covers, getting one family floater plan will mean the same features and benefits are enjoyed by all. The cover or sum assured is shared by all family members. For example, if your family floater plan offers coverage of Rs. 5 lakhs, your entire family can claim up to the maximum limit of Rs. 5 lakhs.
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Advantages and Disadvantages
Picking an individual plan over a family floater plan may not be that simple. You will need to look at a number of factors such as sum assured, network hospitals, features offered and other benefits. Here’s a look at the advantages and disadvantages of both plans. This can help you make an informed decision.
Individual health plans
Individual health plan means a dedicated Health Insurance plan for each family member. Since you pay a premium for each plan, you will have a sum assured for each family member. No sharing! However, even if you have a low health risk, the total premium you will end up paying will be higher than that for a family floater plan. For example, if a 30-year-old male opts for a cover of Rs. 2 lakhs each for his wife, child, and himself, his premium is likely to be more than Rs. 10,000. On the other hand, a family floater policy for a cover of Rs. 6 lakhs will cost just around Rs. 4,000, making it a cheaper option.
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However, with individual plans, there are no age restrictions and you can get Health Insurance plans even for your extended family members, like your in-laws and parents. If your family has a higher health risk, then individual plans offer better protection compared to family floater plans where the sum assured is shared among the family members.
An individual health plan will be required for elderly members of a family as they tend to have health issues more often.
Family floater plans
A family floater plan is a Health Insurance plan offering protection to the entire family under a single plan. As shown earlier, the premium for a family floater plan usually works out to be much cheaper than the premiums that you might pay for Health Insurance plans for each family member.
However, the health cover will be shared. If there are multiple claims in a year, then the sum assured that can be claimed by other family members decreases. If there are too many claims, then, the sum assured may get exhausted. For instance, suppose a policyholder, having a Rs. 2 lakh plan, requires medical treatment in a year with expenses running up to Rs. 1.5 lakhs. If his wife were to fall ill, the amount left for her to claim would be Rs. 50,000 regardless of the actual expenses incurred by her. The total amount that can be claimed cannot exceed the sum assured, which is Rs. 2 lakhs in this case.
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Also, the premium for family floaters is decided based on the age of the eldest family member. So, if you take a family floater plan, you can renew it only until the time the eldest member of the family reaches the maximum renewable age, which might be 60 or 65 years depending on the insurance company. Family floater plans are usually available only for your immediate family including spouse and children. In many cases, you might not be able to include your parents or in-laws in a family floater plan. Even if you can, the premium might be higher.
Individual Health or Family Floater Plan?
This should depend on the needs of your family. In the case of younger individuals, the chances of many family members needing serious medical treatment in a year are substantially low, making family floater plans cost-effective. So, if you are young and have one or no kids, family floater plans can be given adequate cover with substantial savings on the premium.
If your family’s health is in the medium to the high-risk category with some with pre-existing diseases, then opting for an individual health plan might be better. With the chances of medical treatment for more than one family member in a single year being potentially higher, you will receive better protection from individual plans compared to a family floater plan.
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As a prospective Health Insurance buyer, do not take a call between individual and family floater plans based on just premium costs. Understand your family’s needs and health risks before opting for a health plan. This will ensure that every member gets the best cover.