The first question you will face when you look for a health insurance plan, or go to an insurer’s site is whether you want to purchase an individual or family plan.
Every insurer offers these two variants for its health insurance products and there are pros and cons in both of these variants. Let’s compare these two variants to help you make a more informed decision about your health insurance purchase.
First, understand the difference
Let’s first understand the differences between family and individual floater plans before we move on. Individual coverage is only available to one person. Therefore, for each family member that is proposed to be covered, you will need to purchase separate policies depending on the number of family members. Each family member will be provided with a separate amount under the policy.
A family floater policy covers all members of the family. Instead of individual policies that have a specific sum assured, a family floater policy has a single “floater”, which is shared among all members. If a couple has one child, they can have a family floater insurance with Rs. If the sum assured is Rs. 3 lacs, each member of the family shares the Rs. Sum assured: 3 lacs This means that the maximum liability of the insurer towards the entire family in a given year, regardless of who is hospitalized, is Rs. 3 lac.
Additional Difference between Family Floater Policy and Individual Mediclaim Policy
Let’s sum up the above points: Here is a quick overview of the differences between Individual Mediclaim and Family Floater policies.
- Family Floater Policy Coverage – A family floater policy generally covers the primary insured, his spouse and any dependent children. The floater plan covers all members. There are insurance companies that will cover siblings, parents-in law, and up to four children. As the name implies, an individual insurance policy covers only one person.
- Sum Insured – A family floater policy covers the whole family under one sum insured. Any member can use the entire coverage amount. As a member files a claim, the coverage amount will continue to decrease. As with individual health plans, the sum insured isn’t limited to one person. If a claim is made under an individual health plan by one member, the sum insured for all other members will not be affected.
- Premium – Family floater policies have premiums that are determined based on the age of the oldest member of the family to be covered. Individual health policies can only be used for one person, so the premiums will be determined based on that member’s age. For younger families, family floater policies can be more affordable than individual health insurance. Individual policies might be a better choice if the oldest member has a medical condition.
Comparative Analysis of Individual and Family Floater Plan Plans
Individual plans are still preferred over family floater plan, even though they cost a little more. This is because of the following drawbacks:
- Family floater premiums are determined based on the senior member of the plan.
- Insurers offered renewals only up to a certain age. If a senior citizen has family floater insurance, in this case, in the event that he/she violates the maximum renewal, no family member could continue the policy.
- Children who are covered by family floater or migrate to individual plans for becoming major lose credit for waiting periods, etc.
- Family floater: In the event of a claim by one person, the entire No Claim Bonus is nullified. This effect is even more evident in the case of recent innovations within the health space, where you can get up to 50% or even 100% as NCB for a claim-free year.
- A family floater plan covers only a small number of relationships. Very few insurers will cover this wide range. In general, children and dependent parents are the only ones covered. If one wishes to include grandfathers or in-laws in a family floater plan, one should explore an individual plan.
Important to note that the IRDAI’s 2013 Health Insurance Regulations have remediated all of the gaps mentioned in points 1 through 3. These regulations provide for lifelong renewals of policies, pricing to be based on multiple incidence rates of all members and not just the seniormost member. Credits must also be carried forward in the event that a member is transferred by an insurer to a new plan at a specific exit age.
As we speak, the differences between family and individual floater plans has been greatly reduced by regulatory changes made in 2013. It is now more important to check the pricing and product features than worrying about which family floater or individual version to choose.
Family floater plans have their own advantages. First, you don’t have to manage multiple policies or remember the renewal date. Family floater policies are value for money and are a lot cheaper than individual policies. This is especially important for young families that have limited budgets for their insurance. Another important point to note is that an individual policy cannot be purchased for minors. Therefore, the default option is to buy a family flopper policy.
Let’s look at a couple with 2 children, ages 34, 32, 5, 2 and 2, and their premiums. The parents are 64 and 58, respectively.
All members in one floater insurance of Rs. 10 lacs
There are only a few options here. Oriental Insurance Happy Family Floater Gold, which covered the entire family at Rs. 43, 889
Husband, wife, and children in one family floater scheme of Rs 5 lakhs: Parents in separate family floater plans of Rs. 5 lacs We have many options. You can, for example. Religare Care Super Family Floater costs Rs. 13 654 and parents can be insured in separate family floaters from the same insurer, which will cost Rs. 35,398 The total cost of the project will be Rs. 49,052.
One family floater plan for Rs. 5 lacs: Parents in separate individual health insurance plans of Rs. Each family will receive 5 lacs. This means that husband, wife, and children can still be covered by the Religare Care No Claims Super Family floater, which costs Rs. 13,654. The premium cost for Religare Care separate plans for mother and father will be Rs. 18,137 and Rs. 18,137 and Rs. The total cost is Rs. 49,649.
What strategy should you use?
As you can see, a single family plan with a floater may be less expensive than individual plans. The following three-step approach is more efficient.
1. First, choose the best products based on their features.
* You and your children can be covered in one family floater. If you are at high risk of getting sick, consider taking out separate coverage. You can also cover your spouse and children in a floater plan. Make sure you choose a sufficient amount of coverage to cover multiple family members.
* Purchase individual cover for parents. The above approach will ensure that you get the benefits of low cost of family floater health insurance policies and at the same time, set up a dedicated sum assured for your parents who may be more prone and susceptible to illness/hospitalisation. You can also protect your family floater policy’s NCB from being cancelled in the event of one of your parents becoming hospitalized.
Premium should not be the deciding factor in deciding whether to choose individual or family floater. The gap between family floater and individual plans has been narrowed by regulations. It may be better for younger family members to have coverage in a family flopper and for senior citizens or high-risk individuals to have individual dedicated covers.