Family Floater Vs Individual Health Insurance Plans – Which is better?

Family Floater Vs Individual Health Insurance Plans – Which is better?

Health insurance plan is critical to every individual. In absence of health insurance plan and in medical emergencies, it can ruin your finances. While good awareness is created on how to pick-up a good health insurance plan, still there is lot of confusion and debate about Family Floater Vs Individual Health Insurance plans and among them which is good. In this article, I would discussion about Individual Health insurance plan, Family Floater Health Insurance plans, their pros and cons. Among Family Floater Vs Individual Health Insurance Plans, which one is better?

What is Individual Health Insurance Plan?

Individual Health Insurance plans are those which are insured individually and sum covered is entitled by them separately.

e.g. Rajesh is married with Kausalya and have 2 kids. Rajesh would take individual medical plans for Rs 3 Lakhs each in their names totaling to 4 policies. Each of them would have separate policies and in case of medical emergencies, they can claim upto Rs 3 Lakhs against each members. Maximum amount that can be claimed for 4 members put together is Rs 12 Laksh (Rs 3 Lakhs x 4 members).

Also Read: Which are the Best Health Insurance Policies in India?

What is Family Floater Health Insurance Plan?

Family Health Insurance plans covers health insurance for family members for a fixed sum coverage. Generally family floater health insurance plans covers spouse and kids only and fixed coverage would be shared among all members.

e.g. Mahesh is married with Supriya and have 2 kids. Mahesh would take family floater medical insurance plan for Rs 3 Lakhs covering himself, his spouse and 2 kids. Now in case of medical emergencies to any or all these members, the maximum amount that can be claimed is only Rs 3 Lakhs.

Family Floater Vs Individual Health Insurance Plans – Which is better?

1) Premium of health insurance plan

• Premiums for individual medical insurance plans would be high as you would be taking them individually for all your family members.
• Under family floater a fixed coverage is given to your family which includes spouse and kids. Hence premiums are lower in family floater plans.

2) Renewing of Medical Insurance Plans

• After change in regulations from IRDA, individual medical insurance plans can be renewed lifelong without any restrictions.
• However on other hand, family floater plans would get terminated once senior most member in the plan attains 60 or 65 years of age. This is the age where one need medical assistance, hence family floater plans have major drawbacks with this termination clause. If you want to take individual medical insurance plans at that age, premiums would be very high and you need to wait for pre-existing diseases which would get covered only after 3 or 4 years of taking fresh plan.

3) Coverage of health insurance policy

• You can take individual medical insurance policies for any of your family members including your spouse, kids, parents, in-laws etc.
• On the other hand, family floater health insurance plans, you can add, spouse and children only. Most of the family floater schemes excludes coverage of parents (Excluding policies like Happy Family Floater from Oriental Insurance). You need to take separate policies for your aged parents which would be expensive considering their age. Even children are covered only till 21 years of age in such family floater insurance plans.

4) Customization of health insurance plans

• Family Floater is simple health insurance plan without any customization. You cannot add specific disease coverage or any benefits.
• For individual health insurance plans, you can customize based on individual life style and add critical riders for the earning members which would safeguard in case of loss of such critical members in the family.

Also Read: How to evaluate Unit Linked Insurance Plans in India?

5) Overall coverage of health insurance policy

• In Family Floater, coverage is very low. In case of claim, if total coverage  exhausts, you cannot claim for other members in the family.
• However, in individual medical plans, each and every plan is separate and it would not affect the claim of other members on their plans.

Conclusion: In simple terms, if you are young and have small kids, go for family floater health insurance policies. It would come with less premiums. If you are in middle age or your children have grown up and reaching 21 years of age, you should simply go for individual medical insurance plans as they are exhaustive and score more in terms of benefits, renewability, customization etc. However you need to pay high premiums as you are taking individual plans.

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Suresh
Family Floater Vs Individual Health Insurance Plans

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Suresh KP

Founder at Myinvestmentideas.com

Suresh KP is the Founder of Myinvestmentideas. He is NISM Certified - Investment Adviser and NISM Certified - Research Analyst. He has been analyzing financial markets in the last 20 years.He can be reached at suresh@myinvestmentideas.com

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