Taking Cover. A floater plan for your family

Family floater health insurance plans, as the name suggests, cover your entire family under one policy (and one sum insured). It is similar to individual plans in its features and benefits. It has a waiting period, and deductible clauses, wherever applicable. Why should you opt for family floater? How is it better than individual plans? Here is what you should know:

Why, when to opt?

It is easier to manage one policy than maintain three or four individual plans for each family member. For instance, consider a family floater plan of Apollo Munich’s Optima Restore for a 30-year old male and wife (aged 26 years).

The premium works out to ₹14,861 per year for the family of two for ₹10 lakh sum insured. Now, the premium for the same plan for one individual for SI of ₹5 lakh works out to ₹7,971 per year (For two, it is around ₹16,000). Amit Chhabra, Business head, Health insurance, Policybazaar.com says “In floater plans, not only the risks are shared among the family members, they are cost-effective as well.” As the incidence of health issues is less when the family is young, the premium would also be lower.

While it is understood that family floater covers the entire family under one SI, family here usually includes only self, spouse and two children. Though many health insurers offer to include dependent parents or in-laws as part of the family floater, it would be better to cover them under individual health policies, as age plays an important role in premium pricing in most plans. Also, the chances of having a medical condition are higher with age.

But note that, if your kids are added to the floater policy, then the premium goes up significantly. For instance, consider the same example of Apollo Munich Optima Restore, for a family of four (self, spouse and two kids), the premium works out to be ₹20,953.

Therefore, comparison of floater plans with individual is not possible when kids are included in the cover.

S Prakash, Joint Managing Direct, Star Health and Allied Insurance says, “For a young family, a SI of ₹5 lakh would be ideal, but over time, they need to enhance their health protection to, say, ₹10-15 lakh, as health costs would also go up.”

Downside

Children beyond a certain age are not covered under floater plans. Though it varies with insurers, children beyond 25 years are treated as adults and have to be moved to a separate individual health policy. However, they will be provided the continuity benefit — there will be no separate waiting period for children.

Barring the scope of coverage, individual and family floater plans are the same. You as a policyholder will receive the same benefits such as NCB (no claim bonus), restore/recharge features and portability option. The only downside is that, if there are multiple claims in the same year, the SI available for the family as a whole, reduces.

However, to overcome this limitation, there is a new policy in the market called multi-individual plan offered by players such as Max Bupa Health insurance. It combines both health plans. For instance, if there is a ₹20-lakh plan, the husband (30 years) and wife (26 years), including two kids, would have ₹5 lakh each as individual SI and ₹10 lakh as shared SI. The premium for this plan under Max Bupa Health Companion is ₹23,899, while it is ₹22,276 for the same plan under family floater (₹20 lakh SI).

Though the premium works out to be pricier in the multi-individual plan, Amit Chhabra from Policybazaar.com says, “It gives you the freedom and flexibility to decide when and where you want to use the shared SI”.

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