Family Floater Health Insurance – All You Need To Know

Our biggest asset – our family! Protecting family members during adverse circumstances of life is everyone’s priority. Buying health insurance is a sensible way to financially secure the health requirements of family members. 

A lot of people wonder, ‘should I buy a family health insurance policy or personal health plan?’ or ‘should I buy a separate medical insurance for parents’? And most times, they find the answer to be confusing and complicated. In reality, however, it’s a fairly simple choice to make.

To help you decide, we’ll tell you all about family health insurance:

• What is family floater insurance 
• Benefits of a family insurance plan
• Who should buy it 
• Key points to consider when buying 
• Key steps for buying 

What is a family health insurance plan?

A family floater health insurance is a plan that offers protection against healthcare expenses for you and your family members under one plan. In family plans, the insurance premium and the sum insured are shared amongst the family members who are a part of the policy. For example, if you have a family floater cover of Rs.10 lakh, then each member can get cover up to that amount subject to an overall family limit of Rs.10 lakh.

Most family plans offer coverage for self and spouse, children and parents. A lot of health insurance companies also offer family plans that include coverage for in-laws, siblings and grandparents. Different insurers may offer different kinds of family floater plans.

In a family health insurance plan, the sum insured can be used by all the members if needed or any of the members. For example, if a family of four has a family floater plan of Rs 10 lakhs and one member of the family needs the entire 10 lakhs to cover a medical emergency, the entire amount can be availed to the full limit by that member. Conversely, if any of the members use a sum of say Rs 4 lakh, the remaining Rs 6 lakh can be utilized by the other members. That is what makes a family floater plan more economical and also flexible.

Benefits of family health insurance

Pay single premium: By having a family plan, you will not have to pay different premiums for every family member. 

Single amount of coverage: All insured members can utilize the sum insured equally or fully to the limit or as required. The probability that all family members will need to avail hospitalization cover in the same year is very low.

Coverage for extended family: While most family floater plans have a limit of 4 or 6 members, some plans even offer coverage for extended family members such as in-laws, siblings and grandparents. In some plans, the count can go up to 16 members in one policy.

Flexibility: Family health insurance plans allow the addition of new members in the policy, unlike individual policies, where only a single person can be insured.

Affordable: It is an affordable and economical way to protect the healthcare needs of the entire family. For large families, it is a more cost-effective solution compared to individual plans.

Additional benefits: Family plans also offer additional benefits such as maternity coverage, coverage for newborn babies and more.

Tax benefits: Family floater plans provide tax deductions under Section 80D of the Income Tax Act.

Who must buy family health insurance plans?

Should large families buy it?

Often, large families in India find themselves in financial stress due to the burden of expenses that occur due to medical and healthcare needs of different members of the family, especially senior members. Then, there is also the occasional need for accidental medical care. In such cases, if families have limited budgets to spare for healthcare, the family-floater insurance can be a savior – financially and for safeguarding family members.

Example

Imagine two cases: one where an individual who has a family of four buys a personal health insurance of Rs 2 lakh for each member; and one where the same individual buys a family insurance plan of sum insured of 8 lakh. 

In the first case, the individual has to be hospitalized due to an accident, the total expenditure may be Rs 3 lakh but the sum insured is only 2 lakh.

In the second case, if the individual faces the same event, he can avail Rs 3 lakh coverage or even more, if he needs it.

It is highly unlikely that all members of the family would need medical care at the same time or even in the same year, and hence, a family floater plan proves to be more beneficial in this case.

Now you know why and how a family health insurance plan works out to be better. Those who have a family with many dependents must opt for the family floater plan. 

Should families with a history of illness buy it?

For families that have a history of illnesses or a member with an adverse health condition, it is advisable to stay away from family floater plans. An individual health policy for members with illnesses or senior members would be more suitable than a family plan. 

To make it easier for you, here’s a comparison table to help you decide:

 Family health insurance plan – key points to consider

• Most health insurance companies in India consider the age of the oldest family member for the calculation of the premium amount. This means, if the age difference is too much, the premium amount could be high.
• Typically, a family floater plan allows children to remain a part of the plan only up to a certain age (18 years or 21 years), after which, they may be excluded or have to opt for another plan. 
• The premium amount alone should not be the deciding factor. Family plans are more economical compared to individual sum assured plans. 
• Health insurers offer different kinds of plans that offer coverage for the core family (self, spouse, children and parents) and options for plans with extended family (siblings, grandparents, parents in-law, among others).

Buying health insurance for family – key steps

Decide which family members will be included in the plan

Make note of the family members who you want to include in the family insurance plan. For example, do you have senior citizens in your family – parents, in-laws that you want to include in the plan? Or do you want a plan only for self, spouse and your children.  

This decision will help you work out the sum of the insurance, the features that you must look for in a plan, and other details. It will also help you narrow down your options.

Look into each family member’s healthcare needs – present and future

Different family members have different healthcare needs based on age and individual health. An aging parent would have more healthcare needs compared to a teenager of the family. 

Make a list of all the present and future healthcare needs of each family. This will help you choose a suitable family floater plan that meets your requirements.

Try the health insurance premium calculator 

This step is one of the most important – calculating the amount. That said; it is simple with the online health insurance calculator. For this calculation, you may need these numbers:

• Your family’s annual income
• Your budget for the insurance plan
• Your family’s current healthcare expenses
• The future probable healthcare expenses
• The birthdates of all members, specially the senior most member
• The tenure for which you’re looking to buy the insurance

Using the insurance premium calculator will give you an idea about the amount of premium you will have to pay. You could then discuss it with your family and accordingly plan the finances.

Look for a good insurance company

The market is replete with options of health insurance covers from different insurance companies. Once you have the basic idea about what kind of policy you want to purchase and the key features you are looking for, start the search for a good insurance company. Ask friends for recommendation, read online reviews, research about claim settlement ratio, the history of each insurer and read case studies. Consult an insurance agent, if that helps. 

Compare different plans

After you narrow down to an insurance company, you’ll have to narrow down your policy options. Your insurer or insurance agent will help you do so. Understand the pros and cons of every policy and then make a decision. You can also use online guides and calculators to fine tune your insurance decision.

Buy the policy  

The process of buying insurance is much easier than it used to be, a few decades ago. With insurance companies moving functions online, you can place a request or a query online. It is much faster and more efficient. Most health insurers only insist on a detailed health check only when you are above 46. Otherwise, a self-declaration is good enough. However, it is advisable to have a complete health check done.

In a nutshell

It is important to note that the key to insurance planning for the family is to consider all the pros and cons. knowledgeable assessment, timely decisions and considering future needs will ensure your family’s healthcare needs are taken care of. If you have any more questions about family health insurance plans, reach out to your insurance agent or read more online.