Family Floater Cover

When you subscribe to an OTT platform, whether it’s Netflix, Amazon Prime Video, Zee5, etc. - you have the option of choosing a plan that gives each member their separate profile so they can customise their watchlist and likes accordingly. And, this can be done by paying the subscription fee for a single account instead of creating separate accounts and paying multiple fees for each person.

Similarly, when it comes to health insurance, you can purchase a family health insurance plan. This is easier to manage and cost-effective too! These plans are known as ‘Family Floaters’ and they cover the health insurance requirements of your family without the extra effort and hassle of buying and managing individual plans.

How do family floater plans work? What are their benefits? Are there any drawbacks? Let’s discuss in detail.

Family Floater Health Insurance Plans

A family floater, as discussed before, is a type of health insurance plan. It covers your entire family. So, if one member of your family needs coverage for an expensive medical treatment, the entire sum insured can be used for the same. It is not very likely that multiple family members would need such expensive treatments, and hence, this cover comes in handy for anyone who requires it while being a protective bubble for all members.

An important point to keep in mind is that the claim amount should not exceed the sum insured, whether it’s used by one member or multiple members.

For example, Meenal buys a family floater plan with a sum insured of Rs 30 Lakhs for her 6-member family. Her father needs to undergo a major pancreatic surgery and this procedure will cost around Rs 10 Lakhs. This will be covered by the plan. Her mother needs physiotherapy sessions that cost Rs 5 Lakhs and her husband needs hernia treatment that costs Rs 4 Lakhs. This will be covered by the policy too.

Who can be covered under a family floater plan?

You can insure the following family members under a single family floater plan -

Similarly, when it comes to health insurance, you can purchase a family health insurance plan. This is easier to manage and cost-effective too! These plans are known as ‘Family Floaters’ and they cover the health insurance requirements of your family without the extra effort and hassle of buying and managing individual plans.

  • Yourself
  • Your spouse
  • Upto 4 dependent children (less than 25 years of age),
  • Upto 2 parents or parents-in-law
Please note that some insurers allow the combination of 1 parent + 1 parent-in-law. Some insurers may also let you add aunts, uncles, siblings, etc. to the plan.

Should you invest in a family floater plan?

A family floater plan may be the right choice for you family, if -

No family member suffers from any major or chronic medical conditions

A majority of the family members are young, and therefore, less likely to need hospitalisation in the same year.Upto 2 Only

Only one person, i..e, the policyholder needs the tax benefits. Tax benefits for health insurance plans are laid down by Section 80D of the Income Tax Act.

Family floaters may not be beneficial for all families

Avoid buying a family floater plan if -

The members of your family have wide age gaps. For example, if you include yourself, your spouse, kids, and parents-in-law. The family floater premium may be quite high.

There are elders in the family. They are more likely to require hospitalisation and hence, use up the cover amount. This will leave the younger individuals with a very low or no cover.

Any family members have chronic medical conditions. They have higher chances of getting hospitalised, which essentially means larger expenses.

More than one family member needs tax benefits available with health insurance, under Section 80D of the Income Tax Act.

What should be the sum insured to sufficiently cover your family?

To make sure each person is adequately covered, you need to buy the total of the individual sum insured you were planning to buy for each member of your family.

For example, if you were planning to buy health insurance covers for yourself, your spouse, and child worth Rs 15 Lakhs each - buy a family floater with a sum insured of Rs 45 Lakhs. Do not lessen the amount to Rs 40 Lakhs or 35 Lakhs, just because it’s an umbrella cover. This will ensure that each member is sufficiently covered, even in the off chance that all three of you require hospitalisation in the same year.

Benefits of Family Floater Plans

Family Floaters have the following benefits -

  • Efficient from a cost perspective

    Family floater plans can be a cheaper option for a larger cover. All the members of your family are covered, without anyone having to invest in multiple plans. This can considerably lower the overall premium as well.

    For example, if all the members you intend to cover under the floater are young, the chances of hospitalisation in the same year are low. So, you can opt for a large cover, say Rs 25 Lakhs, for the entire family instead of investing in individual plans worth Rs 25 Lakhs each.

  • Managing a floater is easier

    Buying a floater plan for the entire plan means that you will be required to manage only a single plan. You might have to go through medical tests and declarations for each member during policy purchase, but once it is approved and processed, you won’t have to deal with multiple documents, paying multiple premiums on time, etc.

Drawbacks of Family Floater Plans

While family floaters are cost-effective and easier to manage, they also have a few limitations -

  • If one family member uses up the cover amount, the remaining member might not be left with a sufficient cover

    If a family member gets hospitalised, they might use up a large portion of the cover. In the event this happens, the other members will not have an adequate amount to cover their own hospitalisation expenses - if and when that happens. To make sure this doesn’t happen, choose a cover that can comfortably accommodate each member, and also opt for a restoration benefit.

    Restoration benefit - Some plans give you the option of adding a restoration benefit. So, if one family member uses up the sum insured in a year, it is restored (or refilled) - so other members are not left without a cover. The terms vary across insurers. Make sure you read the details carefully.
  • A single incorrect declaration may impact the entire family’s coverage

    If any family member provides an incorrect medical history to the insurance company and this is found out during a claim, the insurance company will want to recheck and renegotiate the entire insurance policy. They may charge higher premiums or the policy may even be cancelled - putting the entire family’s safety at risk.

Summing Up!

So, we covered Family Floater Health Insurance Plans in quite some detail in this article - the features, benefits, drawbacks. We hope that you can now make a decision as to whether your family needs to be covered under a family floater plan.

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