People are more health-conscious and worried about their well-being. There is increased awareness regarding healthcare costs, as well as health and medical insurance plans that serve to reduce the danger of such spending.
Though many individuals understand the need to invest in a healthcare plan, they are unsure which plan to choose, such as a personal/individual health plan for each family member or a family floater. Individual healthcare plans provide separate insurance for each member with specific medical coverage.
A family floater plan allows any family member to use the insurance policy’s maximum. For example, if you get a family health plan for Rs 6 lakh, any member may use the full amount. As a result, in many aspects, the family floater plan provides more freedom in terms of using complete insurance coverage.
WHAT IS FAMILY FLOATER HEALTH INSURANCE?
Family floater health insurance is a form of medical coverage that includes the entire family under a single policy. All family members share a single amount of coverage rather than having individual policies for each member. This implies that any member of the family may benefit from the insurance coverage up to the policy maximum. The premium for family floater insurance is calculated using the age and health profile of the oldest member of the family, as well as the coverage selected.
It is important to note that with this form of insurance, current coverage applies to all participants of the plan, i.e., coverage is shared as required. One may also observe that such complete coverage for all members of the family is less costly than purchasing separate plans for each family member. Claims are subject to the terms and restrictions set out in the health insurance policy.
WHAT IS INDIVIDUAL HEALTH INSURANCE?
Individual health insurance, as the name implies, offers coverage for one person. This sort of coverage requires each family member to have their own private insurance policy. Individual health insurance premiums are computed based on the insured’s age, health status, and individual risk profile.
If you do not need health insurance for several family members, you should investigate individual health plans. Furthermore, if a member of your family unit requires particular coverage, such as critical illness, cancer, or cardiovascular diseases, it may be advisable to get a specialised form of individual health insurance policy for them. Claims are subject to the terms and restrictions set out in the health insurance policy.
DIFFERENCE BETWEEN FAMILY FLOATER AND INDIVIDUAL MEDICAL OR HEALTH PLAN
Without doing your studies, obtaining health insurance might be difficult. Most of the time, we are unsure about the kind of insurance and coverage necessary. Several governmental and private sector organisations in the nation provide health insurance, which is available in two varieties. It may be used to insure both individuals and groups of people. An individual may get an individual health insurance policy to protect himself, but a family floater policy can be used to insure the whole family. The family health plan is an expanded version of the individual plan, allowing a person to cover their spouse, children, and parents as well.
A policy may be purchased easily; however, the true issue begins when selecting the policy. There are two methods to get health insurance in India. Individual health insurance and Mediclaim family floater plans are available online via insurance aggregators and preferred provider websites. They may also be purchased offline, via direct agents or direct health insurance firms. However, the online approach has emerged as the most convenient and easy way to get insurance since it is less expensive and has a faster response time.
The actual decision when selecting a policy is whether to acquire an individual health insurance policy or a Mediclaim family floater. Both of these plans fulfil the primary purpose of insurance by providing a person with health insurance coverage as well as cash aid in the event of a medical emergency, but their natures vary. Individual health insurance protects just one person, but Mediclaim policies for families cover the whole family. Individual health insurance costs more than family floater medical insurance. People on a tight budget might get Mediclaim coverage for their families. Another advantage of family floaters for families is the coverage they provide. In the case of a single claim in a year, the family member receives a higher claim amount than he would get under solo coverage. Thus, family floater medical insurance is a comprehensive insurance plan for the whole family, providing coverage for everyone, while individual health insurance only covers one person.
| Aspect | Family Floater Health Insurance | Individual Health Insurance |
| Coverage | Shared among family members | Separate coverage for each insured individual |
| Premium Calculation | Based on the oldest member’s age and health profile | Based on each insured person’s risk profile |
| Coverage for Dependents | Spouses, children, and sometimes parents | Only covers the insured individual |
| Price | Single premium for all members may be slightly lower than individual policies for each member | Policy price will depend on the policy chosen. Total cost may depend on the types of policies and coverages chosen |
Let us look at some of the benefits of individual and family floater policies.
ADVANTAGES OF INDIVIDUAL INSURANCE PLANS
- Cashless Claim Service: If you are hospitalised unexpectedly, you may take advantage of the cashless benefit provided by your health insurance policy. Many health insurance carriers provide cashless hospitalisation, which enables a person to get medical services or treatment without having to pay the hospital directly.
- Hospitalisation Daily Allowance: Many insurance companies provide clients a daily allowance for each day they stay in the hospital. This reward is only valid if the insured has spent a minimum number of days in the hospital (as specified in the insurance policy).
- Tax Benefits: If you have purchased a health insurance policy, the premium paid is deductible under Section 80D of the Income Tax Act.
ADVANTAGES OF FAMILY FLOATER PLAN
- bigger Sum Insured: A family floater insurance plan offers a bigger sum insured than individual insurance plans, as well as broader coverage. Family floater plans typically cover the person, spouse, and children; however, some insurance companies additionally cover dependent parents, siblings, and parents-in-law.
- Tax Benefits: Your family floater health insurance policy is entitled to a tax deduction under Section 80D of the Income Tax Act, so you can simply take advantage of it. You may also double the tax advantage if you pay for your parents’ coverage.
- Greater Medical Coverage: The family floater plan provides the most comprehensive medical coverage for your family. This covers hospitalisation bills, doctor consultations, medical treatment costs, hospital staff care, ambulance coverage, and other charges in the event of an illness or accident. Also, some insurance providers offer annual medical check-ups for your whole family.
- Avail savings: The family floater health insurance plan allows you to take advantage of the savings that these plans often provide.
- Simple to add additional family members: A family floater plan makes it simple to add a new family member.
- Continuous Family Coverage: Many insurance carriers now provide two-year policy coverage. This benefit provides continuous, hassle-free coverage with no change in premium payments during the set term.
FAMILY FLOATER OR INDIVIDUAL HEALTH INSURANCE: WHICH IS BETTER?
If you’re asking which is a better health insurance policy—an individual health insurance plan or a family health insurance plan—the truth is that each has advantages and disadvantages. Your specific health insurance needs and expectations determine which plan you should choose.
If you want medical insurance for your entire family in one plan, consider family floater health insurance coverage. On the contrary, if you are searching for health insurance for yourself, you should check into individual health insurance coverage.
If you are deciding between family floaters and individual health insurance for your parents, choose the latter. The reasoning for this decision is that various health insurance criteria are exclusive to the elderly, necessitating separate health insurance coverage for your parents.
As a result, a family floater health insurance plan is the best option for protecting the health of your family members. Because these plans cover the whole family, you won’t have to have separate health insurance coverage for each member. Family floater plans combine health insurance for parents, spouses, and children into a single plan. Thus, before investing in a health insurance plan, you should examine the benefits and drawbacks of both kinds of policies.
DISADVANTAGES OF FLOATER HEALTH INSURANCE PLANS AGAINST INDIVIDUAL HEALTH PLANS
- The sum insured is not fixed for each member
Individual health insurance provides each member with a distinct sum covered. Suppose you have Rs 5 lakh in individual health insurance coverage. Your health insurance paid the price for being hospitalised, which was Rs 2 lakh. In addition, if you are hospitalised for the second time in the same year, you may claim the whole Rs 3 lakh amount protected.
However, under a floater health insurance policy, the total amount insured is intended for all people covered by the same policy. A specific quantity is not set for each member. So, if one family member files a claim, the remainder of the coverage is reduced by that amount. It is not set at Rs 2 lakh per person if five people are covered by a Rs 10 lakh floater health insurance policy. Let me explain with an example.
Assume you have a Rs 10 lakh floater health insurance policy that covers yourself, your spouse, and your two children. Now, you were hospitalised for a specific procedure, and the cost was Rs 5 lakh. Now, the floater health insurance policy will cover the whole sum. However, for that year, the coverage amount for your spouse and children would be lowered to Rs 5 lakh.
- no-claim bonus is nullified if one member claims it in a particular year
Your health insurance provider will reward you for each year without a claim by expanding your coverage or lowering your annual rate. This advantage is known as a no-claim bonus (NCB). This benefit is available for both individual and floater health insurance plans.
Now, if one individual covered by a floater health insurance policy makes a claim in a given year, the whole NCB for that year is voided. However, if each member had separate individual health plans, the NCB (for the individual health insurance policy) would be null and void for the hospitalised person, while others would be allowed to use the NCB for their health policies.
- Children cannot be included in a floater health policy after a certain age
When a kid insured by a floater health insurance policy reaches a certain age, which varies between 18 and 25 (depending on the policy), they are considered adults and must be withdrawn from the plan for the plan to continue.
In such a situation, in addition to the floater health insurance plan, you will need to get a second health insurance policy for your son or daughter.
CONCLUSION
Regardless of the sort of health insurance coverage you choose, it is critical to prioritise your health insurance requirements. You must compare health insurance policies based not only on premiums but also on coverage, renewability, no-claim bonus, and so on.