There is no denying the fact that health insurance – which is a type of insurance that covers the medical expenses of the insured in case of hospitalization – has become a must in today’s world. However, whether to go for an individual policy or a family floater, that is the question.
It may be noted that while an individual health policy covers all members in a family separately, a family health insurance policy, also called floater policy, covers the entire family under one policy and allows the coverage of the policy to be shared among the family members. In other words, a family floater policy covers your family – mostly spouse, dependent children and dependent parents — under a single sum insured, where the sum insured amount floats over all the covered members.
“There are many reasons for buying a health insurance policy, but an individual needs to have clarity on whether to buy an individual or a family floater health cover,” says Rajiv Kumar, MD & CEO, Universal Sompo General Insurance.
Floater policies, for instance, are very efficient in terms of price and handling for renewals and claims, as you get a large cover to share for all the members of your family. The premiums are lower as compared to individual covers, with a wide coverage.
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For example, say there are four members in your family. For a Rs 5-lakh sum insured under a healthcare insurance policy by Universal Sompo, the premium will be as per the below table:
| Age | Individual Policy Premium (Indicative, for Rs 5 lakh SI each) | Family floater Premium (Indicative, for Rs 5 lakh floater SI) | |
| Self | 37 | 6484/- |
10214/-
|
| Spouse | 32 | 5528/- | |
| Son | 8 | 4699/- | |
| Daughter | 5 | 4699/- | |
Total
| 21142/- | ||
It is clear that the premium is nearly double if you take four individual policies rather than a single family floater policy. Also, for renewals and claims handling, administrative expenses are higher and renewal of multiple individual policies is tedious compared to renewing a single floater policy. Considering not all family members claim up to the sum insured limit in a year, floater policies are always economical.
“Floater policies are always economical compared to individual policies, especially for young families. However, it must be kept in mind that in some cases the premium can shoot up as premiums of floater policies are calculated based on the highest age of the family member. Also, in case the elderly insured is suffering from any illness and frequent claims are expected, then individual polices are a better option to opt for. Taking an individual health insurance policy for the eldest member restricts the exhaustion of the sum insured under the family floater cover and it remains secured for other members of the family,” says Kumar.
You should take into consideration the amount of coverage while going in for a health policy. “The coverage taken under a floater policy might not be enough for all the family members. For example, one might take a lesser sum insured assuming that all the members of the family might not fall ill at the same time. However, if that does not happen and all the members of the family fall ill at the same time, then one will be in trouble. Also, where the primary member of the family requires a higher sum insured, non-floater (individual) policies are advisable. An insured can plan to gradually increase the sum insured of dependents,” says Parag Gupta, Chief Underwriting Officer, Bharti AXA General Insurance.
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Another advantage of individual policies is that under individual policies, if there is no claim, the insured is provided with no claim bonus free of cost, whereas in floater polices even if one member makes a claim, the other members are not eligible to get no claim bonus. Hence, if you are keen to get such extended benefits, you should go for individual policies.
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