Family Floater or Individual Health Insurance? A Detailed Comparison

Individual Health Insurance Polices

As the name suggests, this kind of health insurance is purchased for a specific individual. Say, if you buy this policy for yourself, only you will be able to reap the benefits that come with this policy. If you are someone who is engaged in a high-risk job, or with a history of medical complications, an individual health insurance is your best bet. The intent is that through an individual health insurance, you will be the only beneficiary of the decided sum assured and not have to share it with your family as is the case under family floater plans.

Family Floater Health Insurance

In a family floater plan, all family members are covered under the umbrella of a single health insurance policy. It is a flexible plan which allows the pre-decided sum assured to be used by any one from the family, in case of a medical emergency. However, it is important to be mindful if the entire sum assured is to be used to take care of one member, others would be left with no coverage.

Know the Difference

To decide which health insurance policy would serve you better, it is crucial to apprise yourself of the features of both individual and family floater health insurance policies.

• Age: Age of the policy holder is an important factor in setting the premium for a health insurance policy. In cases of individual health insurance, only your own age is considered. In cases of family floater policies, premiums are decided, basis the age of the oldest member covered in the plan. Therefore, a relatively younger family would benefit more from a family floater plan.
• Premium: Higher insurance premiums does not always mean bad. Yet, most of use want to keep the premiums at a reasonable level. Under family floater plans, you get the advantage of paying a single premium amount for a number of members. The per person premium, if calculated, would be quite low as compared to individual health insurance policies were purchased.
• Maturity Age: Typically, family floater plans include children but only until a certain age threshold. When your child, who’s covered under your family floater health insurance, crosses age of 18-25, he/she would need to be covered under their own individual health insurance policy.
• Renewability: A health insurance policy is granted for a specific policy term, with provisions for renewals basis policyholder’s discretion. These renewals are allowed up to a certain age only. Specific to family floater plans, if there is a senior citizen involved the policy will be rendered useless for the rest of the family members, when the former crosses the maximum renewal age.
• No-claim Bonus: This reward is reflected by way of a higher sum assured or a lower premium amount charge, for every claim-free year. The probability of getting this bonus is higher in individual plans, considering in family floater plans claim from any member of the family can cancel this reward.

Scope of Individual Health policies: 

In the family floater vs individual health insurance dilemma, you must know the distinct advantages that an individual health insurance policy offers.

• In an individual health insurance plan, your age will be the only contributing factor toward your premium calculation and you will get a deal based reasonably in your corresponding age range. However, in case of a family floater policy, the senior most member’s age will be considered for premium calculation which could result in higher premium costs as compared to your own age range premium cost.
• Minor children are welcomed within the purview of a family floater policy. However, once they reach the prescribed major age, they would have to migrate out of this policy and lose out on the earned credits by way of this policy such as no-claim bonus advantage, lapse of waiting period etc. Hence, opting for an individual health insurance is the final outcome in these cases.
• The keyword in a family floater plan is family. What defines family in human relation and medical terminology could differ. The latter only recognises certain relationships as family and offers this plan specifically catering to those families, such as parents and dependent kids.

Ease of Family Floater policies

A family floater plan remains a popular choice among the masses and the following pointers contribute to it.

• By way of a family floater health insurance, the hassle of managing multiple individual health insurance policies for family members, filing their sperate claims in times of emergencies, checking in for renewals is eliminated. You will have access to a single point plan, which would take care of your entire family.
• Children below a certain age tend to not get included in individual health insurance policies. By way of a family floater policy, you have the advantage of including your minor children into your health plan and be compensated for expenses incurred for their health.
• In a family floater plan, premium could be calculated higher than an individual health insurance policy, as the former is based on the senior most family member cover in the floater plan – the plan also extends to a number of members. Hence, the per person policy premium turns out to be quite affordable as compared to the cost of individual health insurance policies.

Conclusion: 

The ideal policy for you, between floater vs individual health insurance, is the one that suits your situation the best. Typically, a better strategy is to purchase a family floater plan for young couples or those in a nuclear family set up to benefit and cover maximum individuals. However, if a family is bigger and has multiple senior members, investing in individual health insurance policies would make more sense.

Disclaimer: The above information is indicative in nature. For more details on the risk factor, terms and conditions, please refer to the Sales Brochure and Policy Wordings carefully before concluding a sale.