If you are on the lookout for health insurance, you would have surely encountered the concept of Family Floater Health Insurance Policy. This article explains how this kind of health insurance policy works and how it can benefit you and your family. You can then decide whether to go ahead with it or some other type.
In an individual health insurance policy, each person is covered only to the extent of his/her policy cover limit. However, in a family floater health insurance policy, each person is covered to the extent of the total cover in one master policy for the entire family. It provides each family member with the benefit of using the entire Sum Assured under the master policy if it is required to.
The family floater health insurance policy is indeed a good proposition because anyone in the family can now get a large cover. You will agree that the chances of more than one family member getting hospitalized in a single year are quite low. That’s because everyone will not generally have a health problem simultaneously. Of course, it is not impossible either.
Premium for a family floater health insurance policy is generally lesser than the sum of individual health plans (but yes, there can be exceptions).
Let’s now compare using an example. Look at the table below, which is based on actual premiums for a health insurance product called Care from Religare Health Insurance, a leading company offering health insurance plans in India. (This company is just a random choice, you could do the same analysis using any other similar product from another health insurer, and the conclusions will not be too different.) We will look at a family of four – Father (41 years old), Mother (38 years), Daughter (11 years), Son (5 years) for a health insurance cover for 1 year.
Click here or anywhere on the table below to see it full screen.
So as you can see in the table above, individual health insurance plans for the family (Rs. 5 lakhs for parents, Rs. 3 lakhs for children) costs Rs. 18,295 for 1 year. Here each family member can claim up to their full limit of Rs. 5 lakhs or Rs. 3 lakhs respectively.
A family floater which has a total insurance cover for all members put together for Rs. 5 lakhs will cost the family Rs. 14,618, almost 20% lesser! In fact you can get a Rs. 7 lakhs family floater for Rs. 17,472, still 4% cheaper than the cost of the premium of individual policies. Anyone in the family can claim up to Rs. 7 lakhs for 1 year. If there is a claim, say 4 lakhs by the father, the family (including the father) can still claim up to Rs. 3 lakhs for the rest of the year. Next year, if the policy is renewed, total cover for the family is again reset to Rs. 7 lakhs.
BENEFITS OF FAMILY FLOATER HEALTH INSURANCE POLICY
- Better coverage for individuals : Since each member of the family can use the entire benefit of the family cover, each person gets potentially higher coverage for the same premium paid.
- Better coverage for senior citizens : In some cases, individual health insurance for senior citizens can be a technical problem because of renewal cut-offs beyond a certain age. However if they go through a family floater health insurance, they can get included.
- Cheaper : In most cases, the premiums of a family floater health insurance plan is lesser than the sum of the premiums of individual plans, as you saw in the example above.
- Easy to manage : Instead of different plans for different individuals starting and ending at different times of the year and multiple renewal dates to follow up, a family floater health insurance plan is just one single plan with one renewal date. That’s definitely easy to manage.
- Easy to add members : Rather than buying a new health insurance plan when someone new joins the family (spouse if you get married, a new child is born, your parents join you at home, etc.) it is much easier to add a new member with a family floater health insurance plan.
- Plan continues even if a member dies :In case a senior person in the family who is part of a family floater health insurance plan passes away, the plan still continues with all benefits.
Sounds like the family floater health insurance policy is great value for money. And it is the most obvious choice to make on the type of health insurance plan, right? But don’t jump to conclusions yet. You may be surprised when you get into the details when you will realize that the attractive family floater health insurance policy may actually not be the best option to cover the entire family.
Here’s help to take the decision between the two plans – an individual health insurance plan or a family floater health insurance policy.