Individual Health Insurance Vs. Family Floater Plan

By Adhil Shetty | March 20, 2017

Individual Health Insurance Vs. Family Floater Plan

With Health Insurance providers offering both individual plans and family floaters, one often doesn’t know which one to pick. The answer lies in understanding the health requirement of you and your family. Do you need one of these two options for sufficient coverage, or both?

In order to make an informed decision, you must understand these two types of plans and the pros and cons associated with them.

Related reading: Benefits of e-insurance

What is the difference between an Individual Health Plan and a Family Floater Plan?
While an extended health plan that covers all your family members under one umbrella of terms and conditions is a family floater health plan, a plan that covers each member separately is called an individual health plan.

Following are the factors you must consider before deciding on which plan to pick:

Age

The premium of a family floater is calculated on the basis of the age of the oldest member covered in the plan. Thus, a family with relatively younger members is likely to benefit more from a floater plan, as the premium is lower.

If you have parents older than 50 years of age, you must consider a separate plan for them, while a family floater can take care of the rest of the family. The medical attention needed and healthcare expenses are higher for people at an advanced age, therefore their insurance premium would also be higher. There are dedicated health plans catering to the specific needs of senior citizens – these can be availed for the senior members of the family.

Related reading: Common mistakes to avoid while buying Health Insurance

Maturity Age

You must also consider the age of the children to be covered under the plan. Typically, health plans will cover those children under the age range of 18-25. Anybody over the age limit set by a policy will need to seek an individual health cover. So, for example, when a child who’s a member of a floater plan reaches the policy’s maturity age of 25, he/she will have to seek a fresh cover. Any benefits that may have accrued to him/her on the floater plan (such as completion of waiting periods) will lapse.

Premium

A family floater covers the whole family under one plan. Due to this arrangement, a floater plan’s premium is often lower than the premium you’d pay towards individual health plans for your family members.

No Claim Bonus

Many private insurance companies offer a part of the sum assured as no claim bonus when no claims are made in a policy year. The chances of getting a no claim bonus are higher with individual plans compared to floater plans where a claim from any member of the plan can cancel the possibility of a bonus on the whole plan. In order to protect your no claim bonus, you must get a separate plan for any member of the family whose healthcare costs may be higher.

The best way to go about buying insurance is to mix both individual and family plans based on the number of members to be covered and the individual health condition of each family member.

Understanding the needs of your family will help you take a call on which product to pick. You could also consider getting a top-up on your health plans in order to increase your coverage at lower costs.

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Adhil Shetty

About Adhil Shetty

Adhil Shetty is the Founder and serves as the Chief Executive Officer of BankBazaar.com. Adhil has a Master’s degree in International Relations with a specialization in International Finance and Business from Columbia University in the City of New York, and a Bachelor’s degree in Engineering from the College of Engineering Guindy, Anna University. Adhil is an expert in Personal Finance (Car loan/Home loan and personal loan) and he majorly consults on investment and spends rationalization for the Indian loan borrowers. His guidance is number based with real time interest rate calculations and hence useful for consumer’s real time query.

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