The growing number of illnesses, high costs of medical treatments and unhealthy lifestyle has made it imperative for all to consider health insurance, one of the most important aspects of financial planning in today’s time. In order to avoid financial crisis in times of medical emergencies it is essential to have good health insurance not only for you but your entire family. This is where the confusion between a health insurance plan vis-à-vis Family floater Health insurance plan begins.
Choosing the plan
While, choosing the correct type of plan best suited for you and your family can be a mammoth task. The most common dilemma while choosing health insurance is, whether, to opt for Family Health Insurance Plan or a Family Floater Plan. Though both sound similar and serve the same purpose of insurance but, in reality, they are different from each other in terms of the kind of premium involved and coverage offered.
What is a Family Health Insurance Policy?
A Family Health Plan is buying individual policies for each member in the family at the same time and may or may not have the same sum assured. So, if you buy 3 policies with a sum assured of Rs 3 lakhs for each member of the family, then the total sum assured for the family is Rs 9 lakhs. Simply put, it involves buying independent policies together.
What is a Family Floater Policy?
A family floater plan is a single policy which covers the medical expenses of the entire family under a single sum assured. So, if you buy a family floater plan with a sum assured of Rs 3 lakhs then the policy entitles you to reimburse medical expenses up to the sum assured regardless one or more or all members falling sick.
List of key factors you need to consider while making a choice between the two:
Family Health Insurance Vs Family Floater Plan
One of the most important factor to consider in case of insurance is the amount of cover. As we can see in the above example, in case of a Family Floater Plan the total cover is Rs 3 lakhs for the entire family and in case of Family Health Plan each member is entitled to a cover of Rs. 3 lakhs.
Calculation of Risk
For any type of insurance policy, the premium of the policy is decided after taking into consideration the amount of risk involved. Thus, in case of a family floater plan the premium would be calculated after taking into consideration the risk of the entire family. However, in case of Family Health Insurance Policy the risk is calculated separately for each policy of each individual member.
Calculation of Premium
The amount of premium to be paid in case of a Family Floater Plan and Family Health Insurance Plan will differ depending on the risks involved. In case of a family floater plan the premium is mostly dependent on the person with the highest risk. So, the premium for a young family with no high-risk individuals will be less as compared to a family which comprises one or more older people with higher risks involved. Thus, while it makes sense to buy Family Floater plan for a young family, it may be better to buy a Family Health Insurance Plan for a family with senior citizens as they are considered high risk individuals and would have a significant impact on the total premium in a family floater plan.
Having sufficient cover
The key reason to buy a health insurance policy is to ensure that there is no financial burden on the family in case of any kind of medical emergencies. Hence, it is very important to make sure that you have sufficient cover for the entire family. In case of a Family Health Insurance Plan there is sufficient cover for each family member, but a Family Floater Plan runs a risk of having insufficient cover in case of medical emergencies, such as accidents, involving two or more members covered in the same plan.
Ultimately, making a choice between the two largely depends upon opting for a higher sum assured or settling in for a lower premium and there is no one size fits all solution. Broadly, a Family Floater Plan is cheaper and more suitable for a young family as you can get cover for the entire family at a lower cost. Likewise, buying a Family Health Insurance is more suitable for a family involving more high- risk individuals to have sufficient cover in case of emergencies, albeit, for a higher premium.