Individual or Family Floater Health Insurance Plan

Staying fit and healthy is the topmost priority these days because a health emergency/injury can hit at any time. Thus, everyone should purchase an early health insurance policy that will secure their health as well as finances. Over the past few years, healthcare costs have risen drastically, and a health insurance policy will offer you adequate coverage against these sky-high costs. However, while purchasing a health insurance policy, people often get confused regarding what type of policy they should buy, an individual health insurance plan or a family floater health insurance policy. Both are indemnity plans and have some upsides and downsides.

Let’s find out both plans in detail and discuss which one is better.

Individual Health Insurance

As the name suggests, this type of plan offers coverage only to a single person. This plan doesn’t cover your family members under a single plan; rather it covers individuals separately. This plan is ideal for those who are looking for individual coverage and want to protect their senior parents from health emergencies and medical inflation. Some benefits of this plan are:

• Tax Benefits: You are eligible for tax benefits against all your health insurance premiums under section 80D of the Income Tax Act.
• No Claim Bonus: for each claim-free year, you will get a “no claim bonus” from your insurer
• Wide range of coverage: An individual health insurance plan offers you sufficient coverage against various ailments/diseases.

What is Family Floater Health Insurance?

A floater health insurance policy covers every member of your family under a single policy. But there will be only one sum insured, and it will be shared between every insured family member. So in this type of plan, the family floater means the sum insured floats between family members.

For example, you purchase a floater policy of Rs. 10 lakh for your three family members. If anyone of the family uses the policy up to Rs. 5 lakh, then the remaining Rs. 5 lakh can be claimed by the rest of the members.

Due to financial burden, many Indian families often think about how they will meet today’s healthcare expenditures. In such cases, a family floater health insurance plan could be the best option for both financial and overall health.

Individual Health Insurance Policy vs Family Floater Plan

• Definition
• Coverage
• Advantages
• Disadvantages
• Illustration
• Tips and Recommendation
• Preferred choice

Definition

Individual health insurance covers only a single person under the plan. This implies the sum insured is devoted to one person only, and thus, it can’t be shared. On the other hand, all your family members are covered under a single-family floater plan. This means every member of the family will share the sum insured.

Coverage

An individual health plan offers coverage to the single individual insured in the plan. For example, if you have purchased a policy of Rs. 10 lakh (the sum insured amount is Rs. 10 lakh), then only you will get benefits up to Rs. 10 lakh for the entire policy period. A family floater plan offers coverage to all family members. If you purchased a floater policy of Rs. 15 lakh, then this amount will be available for all family members.

Advantages

The prime advantage of an individual health insurance plan is that it offers extensive coverage to every individual. This plan is ideal for senior citizens who need wide-ranging coverage for their illnesses. The biggest advantage of a family floater health policy is that the health insurance premium is budget-friendly and it will not burn your pocket. Here, you need to pay the premium amount at a time for all family members.

Disadvantages

The primary disadvantage of an individual health insurance policy is that this type of plan offers adequate coverage to only one person. The main disadvantage of a family floater plan is that the sum insured may not be adequate for all family members.

Illustration

A 30-year-old man purchased an individual health plan for himself and his senior father. He takes a personal plan each of sum insured 5 lakhs. This means he and his father both will have Rs. 5 lakh coverage for their healthcare needs throughout the year. On the other hand, a person with a family of four (his wife and two children) purchased a family floater policy of Rs. 10 lakh. This means all four family members can use up to Rs. 10 lakh in a policy year for their healthcare requirements.

Tips and Recommendation

If you have purchased an individual health policy, then you must opt for relevant add-ons for every member. If you select a family floater plan, then always go for a higher sum insured amount so that every member gets adequate coverage during an emergency.

Preferred choice 

An individual health policy is ideal for your senior parents or if your family size is small. On the other hand, if your family size is bigger, then you must opt for a family floater plan.

When choosing a plan among these two, consider only the premium amount. For example, a floater policy could be ideal for a young couple, while senior citizens should look for individual health insurance plans. But before committing anything, consider your healthcare requirements and budget and choose the best one.