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

Family Floater Vs Individual Health Insurance PlansFamily 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

Suresh KP
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10 comments

  • Partha

    Thanks Suresh.

    I’ve gone through the details of both the TERM Insurance – “ICICI Pru iProtect Smart” and “HDFC Click to Protect Plus”.

    I want to take ICICI Pru – Life Option( Plain one) for 1 Crore and for 37 years.

    My age is 38 and I want to cover for 75 years.

    Do you think any additional thing you see which is better in HDFC compared to ICICI?

    Please suggest.

    Thanks,
    Partha

  • Partha

    Hi Suresh

    Thanks a lot for your service in providing the Investment ideas.I’m working in a Software company and my monthly income is close to 1 Lac.I want to take a Term Insurance Plan for 1 Crore with “HDFC Click to Protect Policy”.

    I went through your review on this Policy.Still I have few clarifications as below:

    1) My company is providing me 40 Lacs Life coverage for Rs 2500/ as annual premium.
    So, Shall I take the Polciy only for 60 lacs or shall I go with 1 Crore itself?
    2) Since there will not be any pension in my job, it may be difficult for me to pay the premium after 58 years of age.So, for how many years should I have to take the Policy?

    Please help me in deciding the Policy with the term.

    Thanks,
    Partha

    • Partha, Don’t depend on your company insurance for life insurance purpose. You may leave job or you may change job. Hence consider taking life insurance on your own. Ideally life insurance should be taken till the time you earn. If you are expecting to earn till 58, considering a life insurance till that age is sufficient.

  • RUSSI BHOWAL

    Hi Suresh , your articles are very good . We can gain lot of knowledge from those . Keep posting stuffs like this . I appreciate . Can you tell me what medical and health insurance available in the market for seniors people who are above 60 .

  • umesh

    Suresh, thanks a ton !! Many of us take policy but do not know about these silent killer points. Max Bhupa family floater does not talk about this so not sure if its applicable but your have open my eyes 🙂

    Thanks again !!

  • Sourirajan

    Dear Mr.Suresh…Thanks a lot for this very useful article..I am 53 years of age and was very happy having a family floater for me and my wife..without being aware of termination of policy on reaching 60 years..you have now made me sit up and think about what should be done..

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