Summary of this article
Family floater plans offer shared cover, cost-effective for families
Premium depends on oldest member, may raise overall cost
One large claim can exhaust cover for all members
Experts suggest separate policies for older/high-risk members
Family floater health insurance makes financial sense since all insured members share a single sum insured. Here, if a family of four has a sum assured of Rs 15 lakh, the family will be protected for up to Rs 15 lakh for all members of the family.
Premium Linked To Oldest Member
“However, the premium for such plans may be influenced by the oldest person. Families who wish to regulate their premiums for a floater plan can opt for two different health covers. One where all members of the family share the base coverage, and the other where individual health insurance can be additionally taken for older parents or persons with pre-existing diseases,” says Manish Dodeja, Chief Operating Officer, Care Health Insurance.
Furthermore, in the event of a major claim from one member of the family, the others may end up with very low or no insurance cover at all. “Therefore, though the family floater plans are convenient and economical, the cost-effectiveness of the insurance floaters may be reduced with the diversity of the family members’ ages and the rising healthcare costs,” says Udayan Joshi, Chief Operating Officer, SBI General Insurance.
Separate Covers For Better Balance
Overall, family floaters provide both convenience and financial security for the entire family, and the coverage can be customized as per the members’ health requirements.
Splitting policies is a consideration when there is a wide age gap or when there are different healthcare needs within a family. For example, when the family members are older or have pre-existing conditions, having them on a separate policy will ensure that their risks do not inflate premiums for the rest of the family. “Similarly, younger members may also benefit from better coverage as healthcare costs change with time. Having separate policies will ensure that each person has an optimal sum insured and that one person’s claims do not affect another’s cover,” says Joshi.
Coverage suitability, whether in individual health insurance or a family floater plan, may vary depending on one’s specific health needs and requirements. A floater plan has shared coverage that can be substantially consumed by a single member's hospitalization, potentially offering a larger sum insured when in the hour of need. “While floater plans suit families well, the choice between floater and individual plans should depend on individuals' needs, including their health history and how much coverage they need. There is no difference in claims experience between a floater and an individual policy,” says Dodeja.
