Why Must You Have a Family Health Insurance Policy?

by SMCIB on Wednesday, 25 January 2023

Why Must You Have a Family Health Insurance Policy?

You must have heard of combo plans, right? You see them at movie theatres, restaurants, OTT platforms, clothing stores, and so on. You not only get a variety of options in a single go but also get amazing price deals as they are cheaper as compared to purchasing individual products.

When it comes to health insurance, family health insurance policies work in a similar way. Let’s have an in-depth look!


What is a Family Health Insurance Policy?

Family health insurance plans or family floater plans cover multiple family members under the same health insurance cover, which means the total sum insured is split among all of them. You will need to manage only one policy and pay one premium regularly. It is an efficient way to get financial protection against medical expenses for all your family members.

In general, a family floater plan covers you, your spouse, up to four dependent children (who must be younger than 24 or 25), and up to two parents or parents-in-law. Some insurance companies also allow a combination of 1 parent and 1 parent-in-law.

Different insurance companies can have different limits on the total number of people you can insure under a single-family floater policy. So, go through the policy wordings to understand the terms and conditions associated with the policy you are going to buy.

How does it work?

All family members share the insurance coverage provided under a family health insurance policy. You will only need to manage and pay a single policy's premium.

Because it is unlikely that several family members will need hospitalisation in the same year, it is a good way to protect your family. Additionally, a large cover can help anyone in need. The entire sum insured may be used if one of the family members requires coverage for expensive medical care.

For example, Nisha buys a family health insurance policy for herself, her husband, and her son with a cover amount of Rs. 20 lakhs.

  1. In the same year, her husband undergoes treatment for a kidney disorder, which costs Rs. 5 Lakhs. These costs will be covered under the policy.

  2. Nisha had to undergo heart surgery after a few months, which cost her Rs 2 Lakhs. This will also be covered by the policy.

Why is it necessary to have Family Health Insurance?

Here are a few reasons why you must consider buying a family health insurance policy -

  1. Assurance Regarding Family's Health

    Having health insurance will give you peace of mind about the costs associated with medical treatments. You can rely on the insurance provider to protect you when you or any family member needs it the most. An unexpected medical expense can be physically and financially taxing. By purchasing health insurance, you can rest assured that costs related to medical treatment will be covered. Health insurance covers a variety of services, including hospitalisation, tests, ambulance fees, doctor visits, medications, etc.

  2. Each Family Member has the Access to One Large Cover

    As discussed, in a family health insurance policy, the entire sum insured is split among all the family members. By purchasing a single policy, you can ensure that the costs associated with the medical treatment of your family members are covered.

    The entire cover amount can be used by a single member also if there is a need for expensive hospitalisation. Since it's very unlikely that everyone in the family will fall ill and require hospitalisation at the same time, this policy is very beneficial.

  3. As Compared to Individual Plans, This is More Affordable

    Since the whole family is covered by one plan, you don't need to invest in multiple plans to cover everyone. And so, you can save up quite a bit on the premiums!

    For instance, you will pay higher premiums if you buy two individual health insurance plans with Rs. 10 lakhs of coverage each for yourself and your partner rather than a family health insurance plan with a sum insured of Rs. 20 lakhs that covers both of you.

    Note: The cost of a floater may, in some cases, be higher than the cost of purchasing separate individual health insurance policies for the same number of people.

  4. Manage Only One Policy And One Policy Document

    Besides everything, managing this policy becomes easy as everyone is protected by a single policy - and you only need to pay one premium - making it easy for you to manage.

  5. Easily Insure New Family Members

    It is simple to add a new family member to your family health insurance plan. All you have to do is inform the insurer and pay additional premiums. On the contrary, when it comes to individual health insurance, you will need to start from scratch by getting each family member their policy.

  6. Acts As A Monetary Back-Up When You Need It

    You and your loved ones will receive high-quality care under a family health insurance plan. You need not worry at all about the cost of treatment, especially if the treatment is carried out in a network hospital since the bills are settled between the hospital and insurer - without you having to arrange funds. However, you may be required to pay for certain expenses that your policy may not cover.

  7. Tax Advantages

    Under Section 80D of the Income Tax Act of 1961, the annual premiums you pay for a family health insurance policy are eligible for tax benefits.

Wrapping Up

Family health insurance plans are highly beneficial because they are less expensive and provide protection to your loved ones under a single cover. You can find the best family health insurance plan by considering your needs and by comparing various plans available in the market. We hope the points discussed above help you find the best policy for your loved ones and provide them with the quality medical care they deserve.

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