How Do I Choose the Best Family Health Insurance Floater?

Things to Keep in Mind When Choosing the Best Family Health Insurance Floater

The COVID-19 pandemic is an eye-opener for many who think buying health insurance is a dead investment. During the peak of the pandemic, many people lost their loved ones because they did not have enough financial coverage to meet the high healthcare costs. Having health insurance is important at all times. It ensures access to the best healthcare facilities and services without worrying about ever-rising medical costs.

Broadly, there are two types of health insurance plans—individual and family floater plans. While an individual plan covers the medical needs of an individual, a family health insurance plan covers all members of a family under a single plan. Under a family plan, the sum insured can be used by all insured members of the family. This kind of plan takes benefit of the slight chance that everyone in the family may fall ill at once or during the same period.

What does the term “family floater” mean?

A “family floater” insurance policy protects the entire family instead of just the policyholder. As a result, because a floater covers everyone in the family, they all benefit from a larger shared pool. For example, if you buy a family health insurance plan worth Rs 8 lakh, then the sum insured can be used by all insured members depending on their individual needs. There is no cap on how much can a member utilise. Coverage remains valid for the remaining sum insured unless the family exhausts the entire amount of Rs 8 lakh during the policy period.

In another scenario, you may buy an individual health plan for each member of the family, say worth Rs 2 lakh each. Now, you would still invest Rs 8 lakh for a family of four, but each member can avail of up to Rs 2 lakh only. It means if a member needs Rs 3 lakh to meet medical expenses, you would have to pay the additional Rs 1 lakh from your pocket. Meanwhile, other family members may not use their sum insured at all.

Advantages of a family floater plan

Family floater health insurance promises the following benefits to the policyholder:

1. It allows you to cover your entire family under one health insurance plan. It means you do not have to juggle multiple individual plans for exhaustive coverage for your family.
2. Since you invest in one policy and not in several individual health insurance plans, the overall cost of coverage is cheaper compared to a family plan.
3. A family plan can be the best health insurance for parents without a severe medical history as it offers coverage at a lower cost compared to senior citizen plans.
4. Adding new family members to the plan is easier compared to buying a new individual plan every time you want to extend coverage to someone.

Disadvantages of family health insurance

While family floater plans come with several advantages, some disadvantages of such plans are:

1. Since the sum insured is shared among insured members of the family, the health insurance coverage may prove inadequate if more than one member of the family falls sick, needing hospitalisation and treatment, at the same time.
2. The premium amount is based on several factors associated with coverage-seeking family members. This includes the age of the oldest member of the family, the medical history of family members to see if even one person is a high-risk group due to their age and/or job, and more. For example, the premiums will be higher if a family floater has an elderly parent and/or a spouse who works on a construction site.
3. Most insurance companies allow covering only you, your spouse, and your children under family health insurance. Therefore, you will have to research and find a credible insurance provider if you want coverage for your parents, siblings, and/or in-laws as well.
4. A family floater policy can be renewed only when the oldest member of the family reaches the maximum age required for renewal.

Criteria to select the best family floater health insurance

Because each insurance provider will have a different set of terms, conditions, inclusions, and exclusions, it is essential to understand the intricacy of the plan before buying it. It is important to keep a few things in mind when buying a family floater plan.

• • Limits on the maximum and minimum age: Usually, you, your spouse, and your two dependent children are covered by standard family plans. Some insurers may let you add your parents and/or in-laws to the plan. Either way, risk assessment guidelines or underwriting for the ages of those assured take age into account, especially if parents are involved.
  • Sum insured: The Rs 5 lakh family health insurance floater coverage is more than enough in most parts of the country. More is necessary if you live in a metro location where medical care costs are significantly high. For example, a stay of two to three days for a typical medical reason can cost between Rs 60,000 and 70,000 in private hospitals in large cities. Treatment for more severe illnesses could run into lakhs of rupees.

• Coverage needs of your family: When choosing insurance, age and family size are crucial considerations. For example, a youthful family can get by with an insurance policy of Rs 5 lakh, while a family with older members should opt for a more comprehensive floater policy. Since the family floater premiums are based on the age of the most senior member, you can choose to buy an individual senior citizen policy for your elderly parent(s) needing added coverage.

Before choosing a family health insurance plan, assess your family’s coverage needs and overall budget. See if it is better to cover your elderly parents under a family floater plan, or should you invest in a senior citizen plan that is tailored to meet the needs of elderly individuals. Always opt for a plan that offers exhaustive coverage at the best cost.