Selecting the best family floater health insurance
With the rising cost of healthcare, Health insurance is a prudent way to ensure you and your loved ones are taken care of should the hospitalisation need arises. Hospitalisation either due to illness or due to an accident can put a major dent in your finances with hospital bills, cost of diagnostic tests and medicines, lost wages and other incidental expenses.
Accidents and illness can happen anytime. With the modern lifestyle, more and more people are leading a lifestyle of stressful workloads, improper food habits and irregular sleep patterns, which has resulted in a dramatic increase in so-called lifestyle diseases. These diseases require regular monitoring with the help of health checkups and can lead to life-threatening situations if left untreated. Even a nuclear family of four can incur major healthcare costs in the form of health checkups, medicines and injury and illness treatments. An untimely health emergency can put your family finances in a tailspin, and health insurance is a must to address these concerns.
Benefits of Health Insurance
Health insurance is not just for big diseases and surgeries but also can cover many other expenses that are incidental. Most health insurance policies cover health checkups periodically, pre and post hospitalisation expenses up to 60 days, many daycare procedures, doctors’ fees, room rent and other in-patient charges, Operation theatre, ICU expenses, additional cash for hospitalisation, ambulance charges etc. Some policies also provide coverage for alternative treatments such as Ayurveda, Unani and Homeopathy.
Another major benefit that most modern family medical insurance policies offer is the convenience of cashless settlement arrangement with major hospitals. If the hospital is listed under the list of network hospitals that the insurers have an arrangement with, then the hospital can submit all the reports of your treatment and submit a claim which can be settled directly by the insurance company. In case of non-network hospital, you are responsible for settling the bill with the hospital, and you can get reimbursed for the same from the insurer upon submitting the necessary paperwork.
You can also avail tax benefit under section 80D of the Income Tax Act on the amount of premium paid towards a family health plan.
Individual Health Insurance Vs Family Floater Health Insurance
A normal individual health insurance policy normally covers the person whose name is on the insurance policy document. It has a fixed sum of insurance with certain add-ons, raiders and exclusions. You can avail treatment in any one of the insurer’s list of network hospitals and get cashless settlement done directly without any out of pocket expense. Premium paid is tax exempt under section 80D of the Income Tax Act. However, you will need one individual policy for each member of the family, which can be very expensive and also makes it very cumbersome to keep track of their premiums, expiration dates etc.
On the other hand, family floater health policy covers the entire family in one single policy. If you are a family of four, you would need 4 different individual health insurance policies with the same amount of coverage or a single family floater policy covering all 4 members of the policy with a floating sum insured. Floating sum insured means any un-well member of the family can utilise the part or whole of sum insured in a policy year. You will end up paying a significantly lower premium under family floater policy compared to multiple individual policies and at the same affording greater sum insured.
A normal family floater insurance policy covers the individual, spouse and two children. In some cases, you can opt for coverage of siblings, dependent parents and parents-in-law with an additional premium. Insurance policies allow the flexibility of adding or removing a family member from the policy and the premium will be accordingly adjusted. The premium for the family floater policy is determined by the oldest member of the family and the number of people in the family. If a dependent child reaches a certain age, he/she may no longer be eligible for the policy and if the oldest member reaches the maximum renewal age, then the policy will automatically expire and cannot be renewed.
How to Choose the Best Family Floater Insurance
Health insurance plans for the family is a tricky choice, and there are a number of insurers in the market who offer family floater health insurance policies. Even though most of them look very similar in their offering, you need to compare different policies and their features and benefits. It is not wise to simply choose the policy with the lowest amount of premium. You have to look at the fine print and compare coverage and exclusions. Some of the important features that you must compare across different family floater health insurance policies to identify the best one:
- Pre and Post Hospitalisation expenses (No of days before and after hospitalisation)
- The waiting period for pre-existing diseases (Most policies usually require a waiting period of 24 to 48 months to cover pre-existing diseases. Shorter the waiting period is better.)
- Coverage – Most policies cover surgeries, day-care procedures, ambulance charges etc. But if you are planning to start a family, you might want to consider a policy that covers childbirth. There may be waiting times for certain procedures such as cataract, knee replacements etc. You should compare these waiting times to choose the right plan for your family. Some plans offer coverage for alternative treatments as well.
- Maximum renewal age: All insurers renew their policies only up to a certain age. You should ask and compare the maximum renewal age of each policy and choose the one that offers continued coverage by guaranteed renewals in your old age when you will need it most.
- Sum Insured – You should also compare the maximum sum insured that different policies offer and the flexibility to increase the sum insured as the costs of healthcare are continuously raising.
- Easy Claim Settlement – You should check for the list of network hospitals in your location where the insurer offers cashless settlement for hassle-free experience.
- Other benefits – Some policies offer additional benefits such as free health checkups once a year, free cash during a hospital stay, coverage for parents-in-law at additional cost etc. If there are no claims made during a policy year, some insurers offer no claim bonus in terms of increased sum insured.
Choose the right plan for your family by comparing these critical aspects and the premium of different family floater policies available in the market.
Advantages of Family Floater Health Insurance Policy
1. Affordability - You can get discounts and incentives with family floater policy, and it will certainly cost lesser than securing individual health policies for different members of your family. It is also possible to get higher floater sum insured, and it means you can rest assured in these times of ever-increasing costs of healthcare.
2. Flexibility – It is possible to add a new member to the policy subject to eligibility. If you are a young couple planning to start a family, you can opt for a policy that offers maternity benefits and newborn care. If your child attains an age of 18 or as the case may be, he/she is automatically excluded from the floater policy.
3. Continuous Cover – You can opt to choose a policy for a period of 2 years and get a discount as well.
4. Coverage for parents and In-laws – Some policies offer to include parents and parents-in-law subject to them being within the maximum renewal age. However, adding senior citizens to your floater policy can significantly increase your premium.
5. Tax Benefit – Section 80D of the Income Tax Act allows up to INR 55,000 exempt from income tax, which is paid for the health insurance premium for self and family.
Thus, a family floater health insurance policy does offer many advantages. However, careful comparison of features and benefits must be made before choosing a policy that suits your individual family configuration.
Few Mistakes to Avoid When Buying Health Insurance
- You should not conceal your medical history, your existing diseases or any other surgeries you may have had in the past. You may be disqualified, and your policy may not be renewed if it is discovered that you have hidden information.
- You should start a young age when the premiums are relatively lower. Premiums are calculated based on the age of the oldest member.
- Most employers offer group health insurance as part of terms of employment. But this is contingent upon holding the same employment. You and your family may be without health insurance if you lose your job or when you are between jobs. It is highly recommended to not rely on employer group health insurance alone and take a supplementary health insurance policy.
- Make sure that the policy you select has coverage for all types of medical treatments that you or your family likely to need. Young couples usually require maternity benefit and infant cover.
- It is important to read the fine print and understand all the limits and sub-clauses. Some policies have limits and sub-limits for certain expenses as a percentage of sum insured. If there is a 1% limit on room rent and your sum insured is only INR 3 lakhs, then you will be paid up to INR 3000 per day towards room rent. If the actual room rent is higher, then you will have to pay the excess from your pocket.
- You should also review your policy every few years and make sure that the sum insured that you have is sufficient for the increased costs of treatment. Sum insured on your policy should be sufficient to cover treatment for all major illnesses.
Keep these points in mind while choosing the family health insurance plan for your family and stay free of tension.
Frequently Asked Questions
- 1. Which health insurance is best for a family?
A family floater health insurance is the best-suited plan for a family. As the name indicates, one single policy covers the entire family (Usually, You, spouse and children and in some cases parents and parents-in-law too). Family floater policy has many advantages over having individual policies for each member of your family. You do not have to maintain several individual policies and track their expiration dates, premiums etc. In addition to the convenience, as it is one single policy with umbrella cover to the entire family, you get higher sum insured and affordable premium. In a policy year, the entire sum insured amount can be utilized by one or more members of the family.
2. How much is health insurance a month for a single person?
Health insurance premiums vary from person to person and depend on several factors such as age, medical history, current health, location and sum insured. You will have to pay higher premiums for higher sum insured. A person aged 30 years will have lesser premium for the same sum insured than a person aged 40 years. Also, a person with prior medical conditions such as diabetes will have to pay more premium than a person with no prior medical history. Your premium may also change based on the frequency of the premium payment. Many insurers offer discounts for two-year policies compared to one-year policy.
- What is a family floater mediclaim policy?
A family floater mediclaim policy or family floater health plan is a policy that is designed to offer health coverage to the families. This is a single policy for the entire family with a specific sum insured amount which can be utilized by any or all members of the family as the medical needs arise. Family floater policy usually provides greater coverage amounts with affordable premiums.
- What does floater policy cover?
A family floater policy covers hospitalization expenses in case of illness or accident for the family members covered under the policy. You, spouse and dependent children are normally covered under the policy. In some cases, dependent parents, parents-in-law can also be included in the policy by paying an additional premium.