Today individuals are more informed about healthcare and benefits of investing in a good health insurance plan. However,one question that still seems common among first time health insurance buyers is – which health insurance plan is better – an individual health insurance or a family floater plan?
Today, with ever rising cost-of-living; expecting medical costs to stay affordable might be a challenge but protecting your savings against such expenses is not – thanks to affordable health insurance plans. However, with many different types of health plans available, buying the right health insurance plan for you and your family remains a challenge.
For instance, when you start looking for options of health plans, you would primarily come across two types of health insurance plans – Individual plan and family floater plan. While both the plans sound very similar to each other, they are different in many aspects.
The basic difference between these two health plans is that under a Individual policy every family member will have individual health cover. Whereas, under a family floater plan, entire family will be covered under a single policy. So, which of the two options would suit your family’s health cover requirements? Let’s take a look-
Individual health insurance plan:
Individual health insurance plan, as the name suggests, covers single person. Which means, you need to buy a separate health plan in the name of every family member. The maximum benefit available per year to each member of the family is limited to the sum assured of the individual policy.
For example, assume there are four members in a family – husband, wife, son and daughter. If they are separately covered under four different policies of Rs. 5 lakh each for husband and wife and Rs. 2 lakh each for their two children; the maximum claim they would be able to avail in a year would be –
Also, the premium would be charged against total sum assured i.e. Rs. 14 lakh.
Family floater health insurance plan:
This is a single insurance policy that provides health insurance cover for the entire family. The term floater means that the health insurance cover is available for any one or more members of the family, subject to the maximum limit of the sum assured of the policy. In the above example, instead of buying four separate policies for each member of the family, if the family buys a single-family floater plan of Rs 14 lakh, the entire family will have an umbrella cover of Rs 14 lakh. Which means, the sum assured of Rs. 14 lakh can be utilized by any one or more members of the family in a year.
For instance, if following husband’s hospitalization, the medical bills amount to Rs. 4 lakh, the balance amount of Rs 10 lakh can be utilized by one or more of the other family members, if hospitalized during the same year. Apart from the advantage of higher cover available for each family member, the family floater plan is generally cheaper than buying separate health insurance plans for individual members of the family.
The premium of a family floater policy is based on the age of the senior-most family member insured under the policy.
Which health insurance policy should you buy?
If yours is a young family with no major history of chronic health issues or pre-existing medical conditions, you may opt for family floater plan. However, if you or any other family member has a pre-existing medical condition or is more prone to illness, it is advisable to opt for individual health insurance plan for each family member. Or, you may buy an individual health insurance plan for the family member with a medical history and family floater for the other members.
If you also want to include your dependent parents in your family health policy, buy individual health insurance plans. Assuming old age makes one more prone to illness, an individual health plan for your parents will ensure you have a dedicated corpus set aside for their medical needs.