Family floater vs Multiple Individual Health Insurance: Which is a better option?

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October 17, 2021 1:45 PM

One benefit of having multiple individual plans for family members is that the sum insured of other members would not be impacted if anyone is admitted to a hospital or takes any other treatment covered by his/her individual plan.

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Health insurance is considered the first thing an earning individual should buy, even before starting the investment journey. Why? Because life is uncertain and a sudden health crisis can create a huge upheaval – both financially and emotionally.

A good health insurance plan can help you tide over the crisis smoothly. However, when it comes to buying the right plan, one needs to decide whether multiple individual health policies or a family floater plan is better for him/her.

Unlike the family floater health insurance plan, which can protect you and your family members under a single plan, individual health insurance provides the cover only to a single individual.

For providing health coverage to the family through multiple individual plans, you will have to buy separate policies in the name of each individual. In this case, the premium will depend on the age of the individual and the sum insured. Some insurance company may also provide you a discount on the total premium if buying individual policies for more than one member of the family simultaneously.

Under the family floater policy, more than one member of the family can get health coverage under the same plan. And only one premium would have to be paid. Generally, the premium is on the basis of the eldest member in a family floater policy.

One benefit of having multiple individual plans for family members is that the sum insured of other members would not be impacted if anyone is admitted to a hospital or takes any other treatment covered by his/her individual plan.

In contrast, all members can avail entire sum insured in a family floater policy. This means that full health coverage would not be possible if more than one member has to be admitted to a hospital simultaneously.

Which is better?

According to Deepak Yohannan, CEO, MyInsuranceClub, having multiple individual plans would be better in terms of coverage. However, this would cost more in terms of the premium paid.

Family floater policy is cost-effective as it provides cover to multiple members of a family and takes advantage of the fact that several members are unlikely to take the benefit of health coverage at once. But if a claim is made, it would be difficult to get the cover amount enhanced.

“Having multiple individual policies is surely better from a cover perspective. Family floater plans are definitely more cost-effective in case there are no claims. But once a member makes a claim, the cost of the whole family floater policy will go up. In Individual plans, only the plan making the claim will get impacted and not the other ones. And once you have made a claim, you might find it difficult to make enhancements in the cover amount – the cost of medical facilities can rise substantially in a period of 10 years,” Yohannan told FE Online.

“So, if you can afford it, take separate individual plans. If cost is a major factor while taking the plan, go with family floater plans,” he added.

One should choose any of the two health insurance options depending on his/her need. For instance, if someone’s income is less and he has small children then a family floater policy would be better. But in case any member of your family has a history of bad health conditions, then buying individual policies would be more helpful as the cost of treatment may be very high.

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