The premium in a family floater policy is calculated based on the eldest member insured. If the age gap between the primary insured and the spouse is significant, the cost advantage of a family cover might be lost.
It is important to stay sufficiently covered for unforeseen medical exigencies and at the same time protect the hard-earned savings.
However, there are instances when policyholders get confused, especially between individual health insurance policies and a family floater policy with their spouse.
Industry experts say both types of policy have their own advantages and concerns.
For instance, Shashank Chaphekar, Chief Distribution Officer, ManipalCigna Health Insurance says, “while family floater policy was a great thing at the point of time, but in today’s environment, with the rise of chronic diseases, declining health and rapidly escalating healthcare costs, which continue to grow at an unsustainable rate, a comprehensive individual cover with higher sum insured and Super Top Up may be more relevant to take care of increasing medical expenses and protect the wealth of individuals.”
Having said so, note that it also depends on a case to case basis.
Anand Roy, MD, Star Health and Allied Insurance says, “The premium in a family floater policy is calculated based on the eldest member insured. If the age gap between the primary insured and the spouse is significant, the cost advantage of a family cover might be lost.”
Hence, one also needs to consider the sum insured in a family floater. Additionally, in case one family member has poor health conditions, the rest of the family are at risk of not having sufficient insurance coverage. Therefore experts say, if the premium amount is not a constraint, then it is always advisable to opt for an individual health insurance policy as the benefits outweigh the cost.
Pros and cons of having individual insurance policies vis-à-vis a family floater policy
Pros of having Individual policies:
- Dedicated limit of insurance for the person covered.
- Ideal product for covering parents and other elders, senior citizens in your family.
- In the case of members with pre-existing medical conditions or with a family medical history of major disease, individual policies provide cover without compromising the rest of the family.
- Income tax deduction under section 80D up to Rs 25,000/- each can be claimed by more than one member of the family (if they are below 60 years of age) and up to Rs 50,000/- each (if they are 60 years and above)
Cons of individual policies:
- The premium payable will be higher compared with the floater cover.
- Managing multiple policies and ensuring renewals in time.
Pros of Floater Policy:
- Family floater policy comes at an affordable premium covering all the family members under one policy sum insured. This is especially beneficial for a nuclear family
- Lower premiums when compared to individual policies
- The best option for first-time buyers.
Cons of Floater Policy:
- In case any single member develops any major ailment, the rest of the family members may not have sufficient insurance coverage.
- Covering parents in family floater plans increases the premium substantially for all.
- Dependent children cannot continue beyond the age of 25 years and will have to opt for an individual cover with continuity of benefits.
Which one scores over the other?
A comprehensive health insurance plan is a must-have today. One may choose between a multi-individual (which offers individual cover for all the insured under a single policy) or family floater policies, instead of multiple individual policies, depending upon the need, medical history and a number of members in the family.
Chaphekar, ManipalCigna Health says, “In case of floater cover people should ensure that sum insured is at least Rs 1 crore and above to access quality healthcare in India / abroad and cater to the problems of ever-increasing medical inflation.”
Experts say because Indians today suffer from various lifestyle-related health conditions such as hypertension, diabetes, and cardiovascular diseases owing to poor management of lifestyle regime. Not to mention the current pandemic situation, which is creating a huge dent in savings, as there is a possibility of the entire family getting affected. Hence, it’s imperative to take these factors into consideration when deciding the right amount of sum insured and type of policy