We have all heard about the family floater health insurance plan. Instead of covering an individual's medical emergency costs -it covers the entire family under one plan. It's easier to manage and cheaper in most cases.
However, its slightly tricky if you look closely. The objective is to buy the correct and the apt amount of cover for your family as well as not spend a bomb on it. And sometimes splitting the family makes a lot of sense.
If you roughly know how a family floater works, skip to part B of this article or get a quick run through on family floater in part A.
Part A: What is a family floater?
The concept of a Family Floater Plan is better understood when compared to a regular individual health insurance. In an individual health insurance, the cover or sum assured is the maximum that can be spent by the individual in one year on hospitalization expenses.
In a family floater the entire family is covered under one cover. Under one amount. So what exactly happens in that the entire sum insured floats in the family. For example
You have a family floater plan of Rs 3 lakh as your sum assured,
You have four members in the family
All four people put together can spend a maximum of Rs.3 Lakhs in one year. What happens is that if one person uses 1 lakh of the sum insured there after only 2 lakhs would be left for the rest of the family to use.
So, a family floater does not mean that each member is covered for Rs. 3 Lakhs. Total expense for the entire family in one year can be Rs. 3 Lakhs. This works well, because hopefully not everyone in the family will fall sick or need hospitalization at the same time.
Part B: Breaking up the family for smarter health insurance
So is family floater a better option? Should you buy an individual cover for each family member or stick with a family product? We did a quick comparison across 3 basic types of family A B and C for multiple types of combinations across 2 prominent health insurance companies. The results are quite interesting. Sometimes breaking up a family could get you much better coverage with marginal additional cost. check out what works best for your family.
FAMILY A: The young family
Health Risk: Low for a young family
Objective: Get basic cover for all at the cheapest cost.
Getting individual health insurance for all family members is more than double the cost of getting a family floater. Health risk is low, just basic coverage is important,cost is the main criteria - Family floater clear winner for a young family. Don't break-up a young family.
FAMILY B (The Middle Aged Family)
Health Risk: High for couple, low for children
Objective: Ensure adequate cover for couple, basic cover for children and lower overall costs.
STAR HEALTH OPTIMA
1. Individual plans for all family members way too expensive, so ruled out
2. Family floater most cost effective, but inadequate coverage for husband and wife. Closer to 50, they need higher coverage.
3. Husband gets an individual plan
FAMILY C (OLD AGE FAMILY)
STAR HEALTH OPTIMA
FAMILY C: THE OLD AGE FAMILY
Hurray! So now that you know the various possible break ups and combinations you are good to play smart moves for your family and yourself.
Recommended Link: Why Family Health Insurance Required?