When Should you buy a Family Floater Health Insurance and When you Shouldn’t?

The COVID-19 outbreak showed people how life could change drastically within a few days. Now, everyone is trying to protect themselves as well as their family members by purchasing comprehensive health insurance policies. A health insurance policy offers you bliss by saving your hard-end money against medical contingencies and critical ailments. When you are considering health insurance policies, there are two variants that you can choose from – individual policy and family floater health insurance policy. Though both health insurance policy plans offer adequate coverage to family members still, the way they offer coverage is different.

An individual health insurance policy offers coverage only to a single person under the plan. On the other hand, a family floater insurance policy covers different members of your family under a single policy plan.

What is Family Floater Health Insurance?

A floater health insurance policy covers every member of the family under a single policy. But there is only one sum insured, and it is available for use for all insured family members. Each member can enjoy coverage up to the sum insured. If a member makes a claim, the sum insured is used up partially, and then the remaining sum insured will be available for use by other family members. For example, suppose you purchased a family floater health insurance of Rs. 10 lakh for your three family members. If one member initiates a claim of Rs.5 lakh, then other members can only claim up to Rs.5 lakhs.

When should you buy a Family Floater Health Insurance Policy?

• You can purchase a family floater policy when you want to include yourself, your spouse, and dependent children under a single policy plan
• If you want to buy individual health policies for every member, then your premium amount will burn your pocket. In this case, a floater policy will be an inexpensive option. 

Benefits of a family floater plan

• Coverage for all family members
• Price Difference
• Easy Renewals
• Reinstatement Benefits

• Coverage for all family members

A family floater plan allows you to add every family member under one single plan. Many insurance companies also offer coverage to dependent siblings and in-laws in your floater insurance plan.

Under a family floater plan, you can even include your parents. Though experts recommend buying separate health insurance plans for your parents to get better coverage for their healthcare requirements, you can still include them under your floater plan. A floater plan is also a budget-friendly option for all family members. So if your parents are healthy and don’t have any major illnesses or pre-existing conditions, you can save a lot of money by including them in your floater plan.

• Price Difference

The family floater insurance policy plans are affordable as compared to the individual insurance plans. For example, if your age is between 30-35 years and you want to purchase an individual health insurance policy of Rs. 5 lakh, then your premium will be Rs 10,500. On the other hand, the premium for a family floater plan (for four members) with the same coverage will be around Rs 35,000. The premium is less and budget-friendly in the case of a floater plan.   

• Easy Renewals

If you purchased individual policies for every family member, then you need to face a lot of hassles during the time of renewal. Because you need to remember every renewal date and corresponding premium amounts for every member. To get rid of all these problems, you can purchase a family floater plan. This eliminates the hassles as you only need to take care of a single policy renewal every year.

• Reinstatement Benefits

You can purchase a floater plan that comes with reinstatement benefits. If any insured member initiates a claim and the entire sum insured gets exhausted, then the coverage amount will be auto-refilled for the remaining tenure period. This ensures that all your loved ones are adequately covered at any point during the policy tenure.

When you don’t opt for a Family Floater Plan

Don’t include your parents under a single floater health insurance policy, as this has many drawbacks.

• You hardly find this kind of plan because only a few insurance companies offer such plans. Thus, it is difficult for you to compare features and choose the best plan.
• The maximum entry age limit for a floater plan is 65 years. If your parents have crossed this bracket, then you can’t include them under your floater plan.
• The premium for a floater policy is calculated based on the age of the oldest member of the family. Therefore, if you include your parents under the same floater family plan, then your premium will be on the higher side.
• If your parents are suffering from any particular severe illness, then the insurer may exclude the benefit of that particular illness from your insurance plan.
• Your parents may need to undergo pre-medical check-ups before including them in the policy. Based on the reports, your application for a family floater policy may get declined or accepted by the insurer with some special conditions.
• In a policy year, if you don’t raise any claim under your floater policy, you will get a No Claim Bonus (NCB). But once you include your parents under the cover, they might need frequent medical assistance because of their age. So, the probability of initiating a claim will be on the higher side, and you will not get any NCB.
• If your children are above 25 years, then don’t opt for a floater policy because most policies allow the age of dependent children between 23-25 years.

So, understand what floater health insurance policy and its merits and demerits are. Next, analyze your coverage needs and then choose a suitable plan that offers all-inclusive coverage.