We have to agree that after knowing the importance of a health insurance plan anybody must have given it a thought once that whether to buy it for an individual or for the whole family, especially if the person is the bread earner of the family.
These are the two variants are the products of the insurance sectors that are most common. However, both come with pros along with corn as well. Therefore, it is important to compare the benefits and drawbacks in these variants so that one can take a better and wise decision regarding his/her purchase of a health insurance policy.
What Do Health Insurance Plans Include
On the basis of requirements, one can customize his/her health insurance policy. It can be clubbed with add-ons as well. Individual health care policy, Family health plan, Senior citizen health plan, surgical plans, critical illness plans, cancer care plans, maternity policies, etc. are few of the various kinds of health insurance policies available in the market. A family floater plan is something that protects the policyholder and his/her family as well.
Features of a Health Insurance Policy
Here is a list of top features of a health insurance policy to benefit its holder:
- Cashless treatment
- Pre and post hospitalization fee cover
- Ambulance fees reimbursement
- Routine medical check-ups expenses cover
- In-patient hospital expenses
- Charges for treatment due to a pre-existing illness
- Charges for treatment availed at home
What a Health Insurance Policy Doesn’t Cover
Here is the list of the cases in which a health insurance policy does not cover:
- No coverage for waiting period (Usually first 30 of policy commencements . For pre-existing diseases, the waiting period can be of 2-4 years)
- Coverage of critical illnesses is subjected to a waiting period of 2-3 years
- Injuries caused by war or terrorism or suicide attempts
- Cosmetic surgeries.
- Treatment by an under-qualified medic or doctors.
People often search for the best family health insurance policies, while looking for a health insurance policy. But if we talk about the actual sense there is nothing termed as ‘best insurance policy’. In fact, the search should be for a policy that meets one’s insurance needs. And in case of understanding insurance has become a difficult task for you, you must go for a third-party, professional opinion. This is why buying a policy online is much better than running from pillar to post.
Family Floater Plan
A health insurance plan that extends the coverage to the entire family rather than just an individual is called a family floater plan. In simple words, a floater brings all the members of the family under an umbrella cover. Under a floater, every family member gets benefits under a larger common pool. It seems only wiser to get a family floater in case of a regular married guy with two kids, with a sum insured of Rs 4,00,000 rather than taking four individual health plans for four family members separately.
How Does a Family Floater work
For example. Mr. Gupta opts for a family floater with a sum insured of Rs 3 lakh. The plan covers him, his spouse and two children. And to the plan, Gupta pays an annual premium of Rs 6,000 on the plan. Considering two different scenarios, we can say that:
Scenario 1: Gupta’s wife contracts an illness and had to be hospitalized. The total expenses incurred on her treatment turned out to be Rs 2,50,000. So, the amount gets reimbursed by the insurer.
Scenario 2: The whole Gupta family contracted severe stomach infection caused by contaminated drinking water. All four of the family members were hospitalized. The total expenses incurred on the treatment turned out to be Rs 4,50,000. The insurance company reimbursed the sum insured in full i.e Rs 3 lakh. Gupta ends up paying the rest of the amount i.e Rs 1.5 lakh out of his own pocket.
However, the chances of getting the entire sum insured exhausted within the policy term are thin. This is because the probability of the whole family getting hospitalized within a single term.
Difference Between Individual and Family Floater Plan
It is important to understand the difference between individual and family floater plans. Under an individual cover, the policy is issued in the name of one person only. So, for all family members that are proposed to be insured, the applicant has to purchase separate policies depending upon the number of members in the family. If so happen, each family member will have a dedicated sum assured under the policy.
On the other hand, under a family floater policy, all family members are covered in a single policy. Being different from an individual policy where there is a dedicated sum assured, here there is a single ‘floater’ sum assured which is shared between all members of the family. For instance, there is a couple and one kid having a family floater policy with a sum assured of Rs 3 lakh, all three members of the family share the Rs 3 lakh sum assured. Because of this the insurer’s maximum liability towards the entire family for a particular year (irrespective of which individual gets hospitalized) stands at Rs 3 lakh.
To make it simpler, we can say that health insurance is an uphill task without performing homework. But the truth is that most of the time the purchaser of the policy is not sure of what kind of policy and coverage is required. Although having the best suitable health insurance has become a very easy task as there are a large number of public and private sector enterprises providing health insurance in the country and it is offered in two variants. A family floater mediclaim can be used to provide health insurance to the whole family while an individual health insurance policy can be taken by an individual to insure them. We can say that a family floater plan is an extended version of the individual plan as an individual can cover their spouse, children and parents as well.
The real dilemma is not buying a policy, but it arises at the time of selection of the policy. So the two ways to buy a health insurance policy, i.e. individual health insurance and family can be bought online through insurance aggregators and preferred provider website. Offline buying the insurance policy is also an option, one can buy it through direct agents as well as from direct health insurance companies. But let us inform our readers that the online method has emerged as the most convenient and easier mode of buying insurance as it is economical and with a shorter turnaround time.
Both the policies, individual health insurance as well as family floater plan serve the basic motive of insurance to provide health insurance coverage to an individual and to provide financial assistance at the time of medical emergencies but they differ in their nature. In comparison with the family floater plan, an individual health insurance policy is relatively expensive as compared to family floater mediclaim. But the low budget is the key feature of a family floater plan. The coverage provided by it to the family is another key feature of a family floater health insurance plan. the family member gets a greater claim amount compared to what he might get on an individual cover, in the event of only one claim in a year. Hence, family floater mediclaim is a complete insurance plan for the entire family providing insurance cover to the whole family whereas individual health insurance caters to just one individual.
Few Other Differences
Here is a quick note on a few more major differences between a family Floater health insurance policies and individual mediclaim plans, penned down by PolicyX:
Coverage: As the name itself says ‘family’, the benefits under a family floater policy is generally extended to the primary insured, his or her spouse and two dependent kids, that is insured members under the floater plan. Meanwhile, it is important to know that there are some insurance providers who are willing to cover parents, siblings, parents-in-law and three or four children. On the other hand, as its name suggests, An individual health insurance policy covers only an individual.
Sum Insured: As we discussed earlier, a family floater policy insures the entire family under one sum insured. The whole coverage amount can be availed by any and even by all of the members. When a member makes a claim, it will keep coming down. In the case with individual health plans, the sum insured is not restricted to one individual. And, when a claim is made by one member under an individual health plan, the sum insured of other members remains intact.
Premium: On the basis of the age of the oldest family member to be insured, the premiums of family floater policies are determined. The premiums will be determined on the basis of the age of that member since individual health policies are availed for only one member. As discussed, the family floater policies are generally more affordable, so it is a more convenient option for younger families. However, individual policies may be the better option, in case the eldest member is suffering from any medical condition or ailment.
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Comparatively Analyzing Individual And Family Floater Health Plans
Individual plans have been recommended despite costing a bit more, over family floater plans due to the following drawbacks in family floater plans as follows:
- The premium is determined in relation to the senior most member in the plan, in a family floater plan.
- Under a family floater plan, the insurers offered renewals up to a certain age only. So, if a senior citizen is covered in family floater plans, in case (s)he breaches the maximum renewal, none of the balance family members could carry forward the policy.
- Under a family floater plan, in the case of children are also covered and migrate to individual plans on becoming major, they lost out on the credit for waiting periods etc.
- Under a family floater, in case of a claim by one member, the entire No Claim Bonus (NCB) is nullified for the year. This effect is more pronounced in the case of recent innovations in health space. It is where the applicant gets up to 50 percent or even 100 percent of the sum assured as NCB for a claim free year.
- One must know before applying for a family floater plan that a very few insurers cover a wide spectrum of relationships in a family floater plan. Normally, only kids and dependent parents are covered and in such a case, in case one wants to cover say, grandfather or in-laws, anyways one will have to explore an individual plan for them.
It is important to know that for gaps as mentioned have been thankfully plugged by IRDAI in its Health Insurance Regulations of 2013. A lifelong renewal of policies, pricing to be basis multiple incidence rates of all members & not the senior most member, and mandatory carry forward of credits in case a member is migrated by the insurer to a new plan on attaining a specified exit age, are few of the basic specifications of the policy.
Hence, as we can see by the above-mentioned pots that the difference between individual and family floater plans have considerably narrowed down due to the regulatory changes a few years ago. And now, it is much more about checking the product features and pricing than worrying about whether to go for an individual or family floater version.
Meanwhile, to be speaking the truth, there are few advantages of a family floater plan as well. It is well for a person who is spared from the hassle of managing multiple policies, remembering renewal date etc. Also, the family floater is value for money policies and come a bit cheaper to individual policies and that’s a plus, especially for young families who are tight on budget for their insurance spending. Along with these benefits, there is one more notable point is that individual policy cannot be taken for minors and hence the default option in such a case is to purchase a family floater policy.
Let us understand through a case study of husband, wife and 2 kids aged 34, 32, 5 and 2 years and parents aged 64 and 58 years, as regards how the premiums compare between individual and family floater policies,
- Option A: All the members of a family covered under one floater policy of Rs 10 lakh. There are very few or we can say very limited options and only one policy namely Oriental Insurance Happy Family Floater - Gold was covering the entire family and the cost came to Rs 43, 889.
- Option B: Suppose, let us say, the husband, wife and kids in one family floater plan of Rs 5 lakh. The parents of the applicant covered in a separate family floater plan of Rs 5 lakh. In a case like this one has multiple options. For instance, husband, wife and kids can be covered in Religare Care No Claim Super Family floater costing Rs 13,654 and parents can be covered in a separate family floater from the same insurer which will cost Rs 35,398. In such a way, the total cost will come to Rs 49,052.
- Option C: Let us say, the husband, wife and kids in one family floater plan of Rs 5 lakh. The parents in the separate individual health insurance plan of Rs 5 lakh each. In such a case, the husband, wife and their kids can continue to be covered by Religare Care No Claim Super Family floater costing Rs 13,654. For both the parents under separate individual plans, the premium cost in Religare Care will come to Rs 18,137 and Rs 17,858 respectively. The total cost will come to Rs 49,649.
Strategy to Go For The Best Suitable Plan
From the above analysis, we can say that a single family floater plan may prove cheaper as compared to individual plans. To make it convenient, you can follow the following three steps:
- Firstly, it is necessary to identify and shortlist the right products on the features.
- Secondly, it is advised to the applicant to cover himself/herself and kids in one family floater. But also, if the applicant is high risk or prone to illness, (s)he should take a separate cover for himself/herself, and cover the rest of the family (spouse and kids) in a floater plan. One should take care to opt for a sufficiently high sum assured as multiple family members are covered in the policy.
- Thirdly, it is also advised that to purchase individual cover for parents. This approach will lead the applicant to ensure that (s)he gets the benefits of the low cost of family floater health insurance policies and at the same time, set up a dedicated sum assured for the parents who may be more prone and susceptible to illness/hospitalization. By doing this, the applicant will also able to protect the NCB under your family floater policy from being nullified in case one of your parents gets hospitalized.
By all means, we can conclude that, while choosing one between an individual health insurance plan and family floater health insurance plan, the premium should only be the deciding factor. Also, we must consider that regulations have narrowed the gap between individual and family floater plans. According to the experts of the field, it may be a better strategy for young family members to be covered in a family floater and individual dedicated covers explored for high risk or senior citizens within the family. We PolicyX, wish you good luck to choose the best suitable plan for you as well as your family.