Which is better: individual health insurance or a family floater?

It would be helpful if you had healthcare insurance coverage to cover your medical bills for the rest of your life. All you have to do to get an individual or family plan coverage. However, you must choose the proper health insurance plan to achieve desired coverage at a reasonable cost. Thus, you must understand the fundamental distinctions between a family floater and individual health insurance.

The distinction between the two is that a family health insurance plan protects every family member under a single plan. In contrast, an individual healthcare plan is only for one person, paying the premium.

Individual health insurance

As the name suggests, a single person is covered under an individual healthcare insurance policy. It gives you individual plans that cover all required medical costs, but it excludes coverage for your members of the family.

Suppose you want coverage for medical needs or to protect your elderly parents. In that case, this kind of plan is excellent (as people get older, health concerns and associated medical costs double). In addition, you can see that having an individual health insurance plan is included in your yearly tax benefits. So your health, which is your most precious possession, is also preserved together with your financial objectives.

Family health insurance

A single policy covers you and your family members with a family health insurance plan. All family members will share in the annual insurance premium cost and the overall coverage amount. Due to increased healthcare expenditures, Indian households sometimes face financial difficulties. Therefore, a family floater insurance plan may be prudent from a financial and health perspective.

For example, your family’s floater insurance is worth Rs. 4 lakhs, and you have a four-person household. Any member may use the 4 lakh rupees in a medical emergency. Else, all 4 members can utilise whatever sums they need within the 4 lakh rupees limit.

In this case, it’s crucial to remember that if one person gets the whole sum covered, the rest would be left with nothing. Therefore, family floater plans are advantageous and well-fitted for couples and nuclear families since they are flexible when utilising the insurance cover for a group.

Difference between individual and family health insurance

  1. Definition:  person and cannot be shared. In contrast, a family floater plan is the kind of health insurance you and your family members share. This means that all plan members would share in the expense of your insurance coverage and the amount covered.
  2. Coverage: Individual healthcare policies cover just one person. As a result, over the policy term, only you will be eligible to get up to SI Rs. 10 lakhs if you bought a plan for that amount. However, if the family healthcare coverage covers all members of the family, things are different. For example, your plan’s SI of Rs. 10 lakhs will cover the whole family.
  3. Advantages: The primary benefit of an individual health insurance plan is the much broader scope of coverage than a family floater. Each insured individual has their amount insured, unlike a family floater where the covered amount is split. Older parents benefit from this. While the main advantage of a family floater policy is that the premium for health insurance is affordable since it is paid once for the whole family.
  4. Disadvantages: An individual healthcare insurance policy’s only drawback is that one will have adequate coverage for them in a single policy year. Moreover, even if they didn’t claim during the year, they are still eligible for a No Claim Bonus. The major disadvantage of a family healthcare plan is that the overall sum insured could not be sufficient for the whole family.

For your ease of understanding let us explain the difference between the two using an example:

A professional woman in her 30s enrols herself and her elderly father in an individual health care plan. She buys individual policies for up to SI of Rs. 5 lakhs. According to this, she and her father would get five lakhs individually to cover their yearly medical costs. A family with two children that chooses a family health care plan will have to divide the whole amount of coverage among the four. For instance, they are only permitted to incur up to Rs. 5 lakhs on all of their medical claims for the whole year if they have a SI of Rs. 5 lakhs.

Which one should you buy?

Thus, a single-family floater plan can be less expensive than individual policies. A more sensible three-step process, on the other hand, is as follows:

  • Prioritise and narrow down the appropriate items based on their attributes.
  • Get a family floater that covers you and your children. Because the insurance covers numerous family members, choose a big enough sum guaranteed. Get individual health insurance if you are at high risk or prone to sickness.
  • Get separate coverage for the parents.

Using the mentioned technique, you may take advantage of family healthcare plans’ inexpensive premiums. At the same time, setting up a specific amount is guaranteed for your parents, who may be more prone to sickness and hospitalisation. Doing so may also prevent the family floater policy’s NCB from being voided if your parents have to be hospitalised.

The decision between the two plans relies on your financial status and your family’s medical conditions. The cheap premium should not be the primary factor in your decision. A family health insurance plan is often chosen since it is less expensive and provides financial and medical protection for all members. Such a plan is advised for nuclear families, but if one member has ongoing medical problems, it may become a financial burden.

In addition, a floater insurance policy won’t be enough for you if an unpleasant catastrophe affects the whole family. It will cost you more to get separate insurance for each family member. Also, it will be hard to keep track of all the policies’ add-ons, renewals, and policy lapses. So the final lesson is that you should know your needs and research before selecting an appropriate health insurance strategy.

Disclaimer: The above information is for illustrative purposes only. For more details, please refer to the policy wordings and prospectus before concluding the sales.


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