Health insurance is an essential component of comprehensive financial planning since medical expenses can go really high. Two primary options for health insurance in India are family floater and individual health insurance.
Each type of policy has its unique features, advantages and disadvantages. This article aims to provide an in-depth analysis of family floater vs individual health insurance, helping individuals make informed buying decisions that complement their health insurance needs.
Understanding Family Floater Health Insurance
What is Family Floater Health Insurance?
Family floater health insurance is a type of health insurance policy that provides coverage for the entire family under a single plan. Instead of buying separate health insurance policies for each family member, you can buy a
family health insurance plan that offers a collective sum insured, which can be utilised by any member of the family covered under the policy.
How Does It Work?
In a family floater plan, the members covered under the plan share the sum insured. For instance, if a family floater plan has a sum insured of ₹10 lakhs and covers four family members, any member can claim up to the full amount or a portion of it for medical expenses. The total claims for the policy period, however, cannot exceed ₹10 lakhs.
Key Features
Single Policy for the Family: A single policy covers multiple family members, making it easier to manage.
Shared Sum Insured: The insured amount is shared among all family members, offering flexibility in coverage.
Cost Efficiency: Premiums for family floater plans are generally lower than the total premiums of individual policies for each member.
Flexible Usage: Any family member can utilise the sum insured, which is particularly beneficial if one member incurs high medical expenses.
Simplified Management: Managing a single policy for the entire family is more convenient compared to handling multiple individual policies.
Who Can Be Covered?
Typically, family floater health insurance plans cover:
- The policyholder
- Spouse
- Dependent children
Some policies also allow the inclusion of:
- Parents
- Parents-in-law
- Siblings
Advantages and Disadvantages of Family Floater Plan
Choosing a family floater plan has its own set of pros and cons. Here is a table summarising
family floater health insurance benefits and drawbacks:
Advantages |
Disadvantages |
Cost-Effective: One premium covers all family members. |
High Usage Risk: High medical expenses for one member can deplete the sum insured. |
Flexibility: Any family member can utilise the sum insured as needed. |
Age Limit: Higher premiums as the oldest member’s age determines the premium. |
Simple Management: Easier to manage one policy instead of multiple. |
Exclusion of New Members: Adding new family members may increase the premium. |
Tax Benefits: Eligible for tax deductions under Section 80D. |
Coverage Ceases: If the primary insured person exits the policy, others are affected.
|
Understanding Individual Health Insurance
What is Individual Health Insurance?
Individual health insurance is a policy that provides health coverage to a single person. Each policyholder has a separate sum insured that is dedicated solely to their medical expenses, ensuring that one person’s claim does not affect the coverage available for another.
How Does It Work?
In an individual health insurance plan, each insured person has their own policy with a dedicated sum insured. For example, if a policy has a sum insured of ₹5 lakhs, the policyholder can claim up to ₹5 lakhs for their medical expenses within the policy period.
Key Features
Dedicated Coverage: Each individual has their own sum insured, ensuring that one person’s medical expenses do not impact others.
Tailored Policies: Policies can be customised based on the individual’s health needs and medical history.
No Sharing of Benefits: The sum insured is exclusively for the policyholder, without the need to share it with family members.
Independent Premiums: Premiums are paid individually, reflecting the specific risk and health profile of each insured person.
Who Can Be Covered?
Individual health insurance covers any single person, and separate policies can be purchased for each family member. This is suitable for:
- Individuals
- Spouses
- Children
- Parents
Advantages and Disadvantages of Individual Health Insurance
Individual health insurance policies also come with their own set of benefits and drawbacks. The following table provides a clear overview:
Advantages |
Disadvantages |
Personalised Coverage: Tailored to individual health needs.
|
Higher Overall Cost: More expensive if purchasing multiple policies for every family member. |
Dedicated Sum Insured: No need to share the insured amount. |
Management Complexity: Multiple policies to manage for the family. |
Lower Risk of Depletion: One person’s claim does not affect others. |
Premiums for Each: Premiums paid separately for each individual. |
Lifetime Renewability: Often offers lifetime renewability for the insured. |
No Flexibility: The sum insured is fixed and cannot be shared. |
Differences Between Family Floater and Individual Mediclaim
Understanding individual vs family floater health insurance is essential to choosing the right plan for your needs. The following table highlights the key differences:
Criteria |
Family Floater Health Insurance |
Individual Health Insurance |
Coverage | The entire family is covered under one policy | A single individual is covered per policy |
Sum Insured | Shared among family members | Dedicated to one person |
Premium | Single premium for all members | Separate premium for each member |
Cost-Effectiveness | Most cost-effective for families | More expensive for multiple members |
Flexibility | Flexible use of sum insured | Fixed sum insured per individual |
Renewal Age limit | Higher age limit for dependents | Varies per individual policy |
Claims | A single claim affects the entire cover | Individual claims do not affect others |
Family Floater vs Individual Health Insurance: Which is a Better Option
The choice between a family floater health insurance plan and individual health insurance policies ultimately depends on your specific circumstances and requirements. Here are some key considerations to help determine the better option for you:
Family Floater Health Insurance may be better if:
You have a large family with multiple members to cover, making individual policies more expensive overall.
Your family members have relatively low and infrequent medical expenses, reducing the risk of depleting the shared sum insured.
You prefer the convenience of managing a single policy for the entire family.
You want to take advantage of the cost savings from a family floater plan's lower premiums.
Individual Health Insurance may be better if:
You have a small family or are an individual without many dependents, making multiple individual policies more affordable.
One or more family members have pre-existing medical conditions or a higher risk of requiring costly medical treatments, in which case having dedicated sum insured amounts would be beneficial.
You prefer the peace of mind that comes with each family member having their own dedicated coverage without the risk of one person's claims affecting others.
You value the ability to customise coverage and choose plans tailored to each individual's specific needs and health profile.
Conclusion
Choosing between a family floater and individual health insurance depends on various factors, including family size, health conditions and budget. Family floater plans offer convenience and cost-effectiveness for families, but they come with the risk of the sum insured being quickly exhausted. On the other hand, individual health insurance provides personalised coverage without the worry of sharing the sum insured, albeit at a higher overall cost if insuring multiple members.
Reliance General Insurance provides both family health insurance and individual health insurance plans with extensive coverage at affordable costs. Moreover, with us, you can choose an
International health insurance plan, which covers your planned treatments at the best hospitals across the globe. Explore our website today to find comprehensive health insurance options tailored to your needs.
Frequently Asked Questions
A large claim by one member can deplete the sum insured, leaving less coverage for other members during the policy period.
Some insurers may allow the conversion of individual policies to a family floater plan, but this depends on the insurer’s terms and conditions.
Yes, premiums paid for both types of health insurance plans are eligible for tax deductions under Section 80D of the Income Tax Act.