If you have a family and are in the market to buy health insurance, the toss-up is between buying an individual health insurance policy and a family floater policy. Individual policies, as the name suggests, cover a single person. Whereas, the floater policy covers the entire family under a single policy. Mint Money explains how you should choose between the two options, if you want to give your family the right level of insurance cover.
If your family is young or the age gap between the spouses is not much, then a floater plan will be cheaper. Say, for a family of four, with age of the spouses being 35 and 33, and that of the kids being 5 and 2, a floater policy for a sum insured of Rs10 lakh will cost Rs21,826. On an individual basis, it would be Rs34,332.
Being cheaper than the individual health plan, the floater health insurance plan makes a higher value cover more affordable. In the price example that we discussed earlier, a family would pay only Rs21,826 to get a Rs10 lakh cover. Also, this cover is available for all members of the family, who are insured under the floater policy.
However, the flip side is that while in an individual plan each individual has a dedicated sum insured, in a floater plan the insurance cover is shared. So if one family member makes a claim, the cover reduces on the rest by that much. In the event of a bad year, when all members need to use the policy, the floater may not be sufficient.
Individual plans are expensive compared to a floater policy. But the cost advantage of a family floater insurance plan diminishes if the age gap between the spouses, or the eldest member, is huge. It could also become financially unviable if one individual is not in good health and poses the risk of using up the entire sum insured.