Now that you have decided that you want a health insurance policy you are wondering about the best way to secure your family. In India, Family Floater and Individual Health Insurance are the options in front of you and here's what they provide.
Family Floater is a policy which covers more than one family member for a fixed cover. Here the fixed cover is shared by all the family members, i.e. if Shah Family of four take a cover of 4 lakh, the entire family can claim up to Rs. 4 lakh together. Generally two adults and two children are covered in a general floater policy.
The plus points
- It is less expensive than Individual Policy. - It is great for younger families with members having low health risk. - You can add your immediate family members like your spouse and kids. - Another benefit is that in case of only one claim in a year, the family member gets a greater claim amount compared to what he might have on an individual cover.
Ex: Mr. Shah and Mr. Mishra are good friends. Both of them realize the importance of health insurance and have bought it for themselves. Mr. Shah has gone ahead and bought a cover of Rs. 3 lakh for his family too.
In a freak car accident, Mr. Shah and Mr. Mishra were injured badly. The cost of the medical expenses came up to Rs.2.5 lakh for both of them. Mr. Shah and Mr. Mishra both had a cover of Rs.1 lakh in individual policy; Mr. Shah had additional cover of Rs. 3 lakh in his family floater so he did not have to pay a single penny while Mr. Mishra had to shell Rs 1.50 lakh from his pocket.
Thus, Mr. Shah had doubly secured himself and thus saved from financial troubles.
The Downers:
- The greatest disadvantage of a floater is that if there is more than one claim in a family in a year, the other family members are left with little cover like the case with Mr. Shah's family. - The policy is valid till the proposer turns 60 or 65 or the maximum age of renewability depending on the policy. - Generally, you can only cover your immediate family members, not even your parents and siblings except in the Oriental's 'Happy Family Floater' where you can cover your parents. - Individual Health Policy is a policy where each of the insured members is entitled to the entire amount separately.
The plus points:
- The policy extends to family members like Parents, in-Laws. - The Individual Policy is great for older families and when the health risk is more. - There are no age restrictions on the maximum age for the members for renewable. - You can avail the benefits of Loading and Discounts until the policy lapses.
The Downers:
The Policy is expensive for the families with low health risk.
Let's take example of Shah Family and Mishra Family to understand the concept better.
Mr. Shah is 55 years old with a wife of age 48 and with kids aged 20, 16.
The Premium for Family Floater of United India Insurance is Rs. 12,813 for a cover amount of Rs. 3 lakh.
If the Family goes for an Individual Policy of the same company the Premium comes to Rs. 14, 676 for cover amount of 2 lakh per family member and totals up to Rs. 8 lakh for the family. (4 members x 2lakhs)
For an extra premium of Rs. 1863, each family member is covered separately, and hence does not have a risk of being left uncovered when there is a large claim from another member.
Thus, the Shah family is advised to go for Individual health Policy.
Now, Mr. Mishra is 30, Mrs. Mishra is 28 and they have kids aged 8 and 3.
The Family Floater for them is of Rs. 5338 for a cover of 3 lakh.
And Individual Policy costs Rs. 8765 for a cover of 2 lakh individually which comes to a total cover of Rs. 8 lakh for the family. (4 members x 2 lakh)
Even here the difference between the Premiums is less; but the family should ideally take a family floater because the risk for them seems low at their age.
From an economical point of view, opting for a Floater seems beneficial for a younger family but in the long run it is essential to be covered individually so that Pre-existing diseases are covered and you are better secured.
Thus, though both of them have their benefits and disadvantages ideally one should have a separate individual cover for themselves as well as a Family Floater for the entire family in the long run.
By Rakesh Kharwar
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