What Are The Benefits Of Family Floater Plans?

A family floater health insurance plan is a type of health insurance that allows you to cover every member of your family for a single premium. The sum promised will be divided among all family members if there are several claims filed at the same time. If your family consists of more than two people, this policy is advantageous. The family floater health insurance policy is affordable since you only have to pay one premium to cover the entire family.

For your family of three to four persons, you may, for instance, purchase a family floater policy for INR 20–25 lakhs. One individual will still be covered by the plan even if they require a costly hospitalization totaling INR 20 lakhs in a given year. In another instance, the floater will still cover any therapies that 2 or 3 people receive that cost INR 5 lakhs each.

Who can you cover under a family floater plan?

You can ensure the following under a single-family floater plan:

Yourself

your partner

Up to 2 parents or parents-in-law and up to 4 dependent children (under 25)

Who Should Buy A Family Floater Plan?

The following circumstances make family floater plans appropriate for your family.

1-Young family-Most of your family members are young, thus they have a lower likelihood of needing hospitalization within one year.

2-No major medical conditions- There are no major or chronic medical issues that any family members have.

3-Only one person needs a tax benefit- when just the proposer is required to use the section 80D tax benefits associated with health insurance policies.

Who Should Avoid Buying A Family Floater Plan?

1-Wide Age Gaps- The price of the floater may rise significantly if your family includes members in a variety of age groups, such as you, your spouse, your parents, and your children. Additionally, because the older members are more likely to be hospitalized and use up the insurance, the younger members will be left without coverage.

2-Have Chronic Medical Conditions–  Members of the family who have a chronic illness are also more likely to be hospitalized and incur more costs than senior family members. A floater might not be appropriate for your family if this is the case.

3-More Than One Member Needs A Tax Benefit- 

When more than one member of your family intends to take advantage of the section 80D tax benefit associated with health insurance

What Are The Benefits Of Family Floater Plans?

A family floater plan has two main advantages.

1-Cost Effective To Get A Large Cover

When compared to single health policies, family health coverage is available at a cheaper premium cost. The premium is often paid at a rate that is 15–25% less than that of standard insurance. Family floater plans have this as their main advantage.

2-Tax Benefits

Under Section 80D of the Income Tax Act, a policyholder may receive tax benefits for paying premiums up to Rs. 55,000, including Rs. 25,000 for themselves and Rs. 30,000 for elderly parents.

3-Option To Increase Sum Insured-

A policyholder may, for a small fee, enhance the coverage’s sum assured to reflect escalating healthcare expenditures. Additionally, as a No Claim Bonus benefit, certain insurance companies immediately raise the sum assured.

4-Cashless Hospitalization

In the hospitals in the insurers’ network, a policyholder’s family can benefit from cashless hospitalization without having to fill out time-consuming paperwork.

5-Hassel Free Claims

A policyholder can quickly resolve the claims of a floating health policy thanks to digitalization. Before choosing a family health plan, you can compare the claim settlement ratios of different insurance providers.

6-Discount On Family Health Plans

Due to digitalization, a policyholder of a floating health insurance policy can promptly resolve claims. The claim settlement ratios of various insurance companies can be compared before selecting a family health plan.

Drawbacks To Family Floater Plans

Having said that, family floater health insurance plans do have a few drawbacks – and you should learn about these carefully before depending on them for your family’s health care expenses.

1- If one family member uses up the cover, the rest of the family might be left without adequate cover.

As was already indicated, your family members may use the complete cover for medical care if they need to be hospitalized. However, in this case, if another member also requires hospitalization, they might not have enough coverage. This occurred in several instances during the Covid19 hospitalizations last year. One after the other, several members of the same family were admitted for treatment. The first family member to be admitted to the hospital used up a sizable portion of the insurance, leaving the others short. To prevent this, pick a cover for the floater that is big enough and, if available, has a restoring advantage.

2-An Incorrect Declaration Will Impact The Entire Family Health Insurance Coverage

The insurer would wish to negotiate the entire policy if any family member gave the insurer inaccurate medical history, which was later discovered during a claim. As a result, there is even a chance that the insurance will be completely canceled or that the premiums will increase significantly and become unsustainable, threatening the health coverage for the entire family.

You can opt for a family floater, a single policy that will cover everyone in your family, as opposed to purchasing individual health insurance policies for each member of your family. Floaters can be more affordable, simpler to handle, and able to cover any family member who could want coverage when compared to purchasing big separate individual covers. However, there would be no cover left for the other members if one member used the entire cover. Consider both of these factors before choosing whether a family floater is right for you.