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Tips to select the best Family Floater Health Insurance Policy

When it comes to buying family floater health insurance, the most common question is: how do you decide the best family floater health plan for yourself? Here are some important points to consider:

  1. Terms and Conditions of Policy
  2. Total Sum Insured
  3. Coverage
  4. Renewability
  5. Claim settlement
  6. Reinstatement benefits
  7. Miscellaneous benefits

First, let’s understand what a family floater health insurance policy is and who needs it. 

Family Floater Plan — What is it?

A family floater health insurance policy basically covers the medical needs of an entire family. Just think of it as your individual health plan and extend it to all the members in your family. 

Individual Health PlanFamily Floater Plan
Provides coverage to an individualProvides coverage to entire family
Costs more even with a 10% discountCosts nearly 20% less
For larger families with senior citizens more vulnerable to health risksFor young couples or smaller families less vulnerable to health risks
Example — On a sum insured of Rs 5 lakh, the premium for an individual aged 30 to 35 is Rs 12,497 approx.Example —On a sum insured of Rs 5 lakh, a family floater plan costs Rs 10,416 approx.

How does it work?

Let’s assume you opt for a Rs 5 lakh family floater policy for a 4-member family. Here are two likely scenarios:

  • Case I: One member of your family falls severely ill and expenses amount to Rs 2.5 lakh.

As a beneficiary of the plan, they can avail Rs 2.5 lakh from the floater sum insured to cover their medical bills. 

  • Case II: The entire family falls ill and expenses amount to Rs 4.5 lakh.

The family floater policy will reimburse the sum insured in full. If treatment expenses exceed your plan, you’ll have to shell out the remaining amount from your pocket. However, it is unlikely for the entire family to be hospitalised within one policy term. 

Benefits of Family Floater Plans

  • Maintaining an inclusive family floater policy is comparatively easier.
  • Yearly premium amount is lower, especially when individuals belong to the same age group.
  • You can include siblings and parents in-law as per policy guidelines.
  • A family floater is cost-effective when it comes to senior citizens. 
  • Policyholders can avail income tax benefits under section 80D. 

Things to Remember to Select the Best Family Floater Health Insurance

Let us now take a look at some of the important points to consider to select the best family floater health insurance plan:

  1. Terms and Conditions of Policy

Terms and conditions is the backbone of your health insurance policy. Reviewing the terms and conditions of your policy is essential to choose the right family floater health insurance for your family.

Although most of the insurance providers have a similar set of terms and conditions for their family floater health insurance policies, there are still some differences. There might be differences in renewability policy, coverage, the definition of immediate family, etc. So it is essential that you review the terms and conditions well.

  1. Total Sum Insured

Total sum insured in a Family Floater Plan stands for the total sum insured stated in the Policy that covers the medical expenses of the family as selected by the Policyholder. Compared to individual plans, the total sum insured is used to cover the medical expenses of your whole family.

While having one plan to cover the whole family is beneficial in a lot of ways, it has its cons too. For instance, in the case of more than one insurance claim within a year, the family members making the claims after the first claim get a thinned-out cover.

  1. Coverage

The coverage of a family floater health insurance policy differs from one insurance provider to another. These plans generally offer full coverage against your family’s medical expenses. 

Family floater plans usually cover daycare procedures, surgeries, room rent, health check-ups and vaccination expenses, pre-hospitalization and post-hospitalization expenses, and AYUSH. A complete coverage ensures that you can focus completely on the well-being of your family and don’t have to worry about medical bills.

  1. Renewability

Renewability is considered one of the major drawbacks of family floater health insurance policies if senior citizen parents are also included in the family floater plan. The family floater plans can only be renewed till the oldest member included in the cover reaches the specified maximum renewability age.

But, many insurance providers have started to offer lifelong renewability in their policies after IRDAI’s intervention of IRDA. Make sure to check the terms and conditions for renewability while selecting the best family floater health insurance plan.

  1. Claim settlement

The Claim Settlement Ratio of an insurance company is the proportion of insurance claims settled by an insurance provider during the financial year. It tells you about the reliability of an insurance provider.

But looking at the claim settlement ratio for the whole insurance company is not enough. Try to find out the claim settlement rate for family floater health insurance claims specifically and then compare between different family floater plans.

  1. Reinstatement benefits

Reinstatement benefit is a benefit wherein the insurance company restores the original sum insured after it gets fully exhausted for covering the family’s medical expenses. It is also called a restoration benefit. 

Most insurance providers offer reinstatement benefits these days. But, it is still better to check and make sure that your cover will get replenished automatically for the next hospitalization that occurs within the policy year if your family has exhausted its cover.

  1. Miscellaneous benefits

There are various other benefits that are offered by insurance companies with their family floater health insurance plans. For example, most family floater policies allow the insured families to avail cashless hospitalization.

While the miscellaneous benefits come last in terms of priority, reviewing all the benefits is very important to select the best Family Floater Health Insurance Policy. Select a family floater plan with cashless hospitalization, hassle-free claims, continuous health cover, and much more.

The Bottom Line

A family floater health insurance policy indeed has more benefits over individual plans for people who are married with children. Many family floater plans also allow senior citizens to be included in the policy which lets people include their parents in the health insurance policy. If you’re married with children and looking for an inclusive policy for your whole family, a family floater health insurance policy is the best insurance plan for you.

But, selecting the best Family Floater Health Insurance Policy for your family can be very puzzling with so many factors to consider. By keeping these seven things in mind, you’ll be able to select the best Family Floater Health Insurance Policy by eliminating all the unsuitable options.

”tips

Which health insurance is often considered the best for Family?

For a family, a family floater health insurance is the best available option. Among many advantages, only a single policy covers the entire family - mainly the policy holder, their spouse and children and in most cases parents and parents-in-law too, though these attract some additional premiums. A family floater policy has many advantages rather than buying individual policies for each member of a family. One does not have to maintain or manages various individual policies and keep track of their expiration dates, premiums, among others. Also, as it is a single policy with coverage for the entire family, one gets the benefit of higher sum insured and affordable premium. For each year of the policy, the entire sum insured amount can be made use by one or many members of the family.

What does a family floater policy cover generally?

Just like an individual health policy, a family floater policy covers hospitalization costs be it due illness or accident for the entire family covered inside the policy. The policy holder, their spouse and dependent children are usually covered under the policy. Also, dependent parents, parents-in-law can also be covered into the policy by paying some additional premium.

What could be the insurance premium for a person monthly?

Premiums for a health insurance policy can vary from person to person depending on various factors viz. age, medical history, current health, location and also the maximum sum insured. The insured shall pay higher premiums if sum insured is higher in value. Say, a person aged 30 years will have to pay lower premium if it’s the same sum insured than a person aged 40 years. This is just for the sake of comparison. It is important to note that, a person with prior medical history of co-morbidities like diabetes will have to pay more premiums than a normal person with no prior medical illnesses. Interestingly premium can change based on the frequency of the premium payment. Most of the insurance providers offer higher discounts for two-year policies compared to a one-year policy.

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