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The Key Differences Between Individual Health Insurance And Family Floater

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Given the rising medical expenses and the higher incidence of lifestyle diseases, you want to ensure that everyone in your family has a health insurance cover. You could either buy individual health insurance covers for each of them or buy a family floater plan. It is like choosing different ice-cream flavors for each member or buying a family pack ice-cream for all. If you are trying to decide which one to opt for, read on.

The difference

When buying individual health insurance plans for each family member, each policy will be priced based on the risk factors of that individual. For example, if you have a family of 4 and purchase policy for a sum assured of Rs. 2 lakhs for each member, the premium for the kids would typically be less than the premium for the father as the kids are considered to have a lower health risk. The cover is for the individual, so excess cover for one member cannot be used to meet the expenses of another – even if all the policies are paid for by the same person,

On the other hand, a family floater health insurance is a single policy providing health cover towards all the members of the family. So, if you have a family floater with a sum assured of Rs. 4 lakhs, you can utilize this towards the medical expenses of any of the family members. That is, if one of the members has medical expenses of Rs. 3 lakhs – this can be covered by the family floater policy, and Rs. 1 lakh worth of cover can still be utilized by any of the family members. This kind of policy is typically priced based on the highest risk individual.

Should you buy family floater or individual?

A family floater covers medical expenses of the entire family rather than just an individual. This can be useful as not all your family members will need medical attention at the same time. You can get a much higher coverage at a lower premium with a family floater plan.

But remember that a family floater is only useful if none of the members covered have a high health risk. So, this is best suited for young couples with kids still in school. It may not be wise to include aging parents in a family floater as they have a higher health risk and therefore need a specialized coverage. If you are a smoker or at a higher risk than average because of your profession - it is best to get an individual insurance as you do not want to use up 100% of the sum-assured on a single family member and leave other members without insurance in practical terms.

Make sure to read the policy terms and conditions carefully to understand what kind of illnesses may be excluded from a family floater. If these covers are important for any of the members, it is advisable to buy individual health insurance for that person and get a family floater for the rest of the family.

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