Health is an important asset of our lives. Everyone is seeking for better health care for his/her family members. However, with the constant rise in medical treatment cost, health care has become an expensive affair. Having health insurance will act as a cushion against expenses that incur during medical emergencies or treatments.
Family Floater Health Insurance Policy- What is it?
It is a type of a health insurance plan which allows members of the family to be insured under a single umbrella policy. Getting a health cover for the entire family is always a wise move. You have two options to cover your family members.
Individual cover: You can opt for individual coverage, wherein an individual sum insured, is available separately for each family member covered under the policy. The insured person can use of the assigned sum assured to meet hospitalization expenses.
|For instance, you bought the individual health insurance policy for all members of the family with a sum insured of Rs 1 lakh. In case, the hospital bill for treatment of your spouse is Rs 1.25 lakhs during a policy year, you need to pay Rs 25,000 from your pocket. Under this scenario, the insurance company will pay only up to Rs 1 lakh for an insured person.|
Family floater cover: Buying a family floater health plan provides health coverage for your entire family against any sickness, illness or disease. A family floater health insurance policy offers a sum insured on a shared or floater basis. It means the available health cover or sum insured under the policy can be utilized by any of the insured members of the family to meet medical expenses incurred during a policy year.
|For instance, you buy a family floater health plan with a sum insured of Rs 5 lakhs. So, the health cover of Rs 5 lakhs can be used by any of the insured member under the policy to take care of health expenses arising during a year. If your spouse has used Rs 2 lakhs of sum insured, then the remaining sum insured of Rs 3 lakhs is left to be used by other insured members to consume within a policy year, in case of a claim.|
Who can be insured under a Family Floater Health Plan?
A family floater health plan usually provides cover for a family (self, spouse and children). Some insurers also cover your dependent parents, siblings, and parents-in-law, only at the cost of additional premium of the existing health insurance policy.
Reasons to opt for a Family Floater Health Plan
- Higher cover for individuals: Each member of the family can use the entire sum assured available for the family. Each insured person gets a higher health cover that will help an insured member to get the treatment done without any financial hiccups.
- Cost effective: The premium amount payable under a family floater health insurance plan is quite affordable than the premiums paid for individual health plans for each family member. A family floater health plan thus ensures an adequate health cover at a relatively lower cost.
- Coverage for senior citizens: Usually, insurers tend to deny renewal of individual health policies for senior citizens after a certain age. A family floater health policy, however, offers cover for senior citizens in your family.
- Hassle free: A family floater health plan is a single plan to get health coverage for your entire family. You don’t need to maintain separate health policies, just pay for a single family floater health policy and keep your family insured against ever-rising medical expenses.
- Flexibility: When a new member such as spouse or a newborn child joins the family, a family floater plan provides you the flexibility to add members. It provides you the ease to extend health coverage for the new entrants also.
- Tax Benefits: The premium amount paid for the health policy during a financial year is eligible for tax benefit under section 80D of the Income Tax Act 1961. The applicable tax benefits are subject to change in tax laws.
Key benefits available under the Family Floater Health Plan
Apart from providing your family an umbrella cover, a family health policy offers several key policy benefits.
- In-patient Hospitalization: All the medical expenses incurred due to hospitalization for more than 24 hours are covered. Hospitalization expenses such as room rent, ICU charges, nursing, doctor’s/surgeon’s fee, blood, oxygen, operation theater charges, etc. are covered.
- Pre-Hospitalization: The medical expenses incurred before the hospitalization are covered under the pre hospitalization expenses such as various diagnostic tests, doctor’s visit, etc., before the hospitalization. Usually it ranges from 30 days to 90 days.
- Post-Hospitalization: The medical expenses incurred after discharge from hospital are reimbursed, as specified under the plan. Any medical expenses such as medicines or any medical tests done post discharge from the hospital are covered. Usually it ranges from 60 days to 180 days.
- Day Care Procedures: Specific medical treatments/procedures that do not require minimum 24 hours of hospitalization are covered. The day care procedures covered may vary from one plan to another, as specified under the plan details.
- Domiciliary Treatment: Medical expenses incurred when the treatment is done at home and under medical advice are also covered, as specified under the policy.
- Restoration Benefit: Several family health plans offer restoration benefit, which helps to reinstate the coverage amount or sum insured in case it gets exhausted during a policy year. This restoration benefit will trigger usually for unrelated illnesses.
- Organ Donor: The medical expenses incurred in the donation of an organ are covered, as specified in the family floater health plan. The donation of organs that are covered under a health policy includes heart, liver, lungs, kidneys, intestine, pancreas, skin and bone marrow, and it may differ depending on the plan chosen.
- No claim bonus: A family floater health insurance policy offers No Claim Bonus (NCB) in case of a claim free policy year. The NCB benefit is usually available as a discount in the future premiums for the health plan.
- Hospital cash: The insurance company offers daily cash allowance, as specified under the terms of the policy. The hospital cash can be utilized to meet some expenses that your health policy does not cover.
Tax Benefits under a Family Floater Health Insurance Plan
A family floater health insurance policy, offers the tax benefit under section 80D of the Income Tax Act towards the premium amount paid in a set financial year.
For the premium paid by you for medical insurance for your family, the available tax deduction is Rs 25,000 when the eldest member is aged below 60 years. When the age of the eldest member (you or your parent) is exceeding 60 years, you can avail a tax deduction of Rs 30,000 till the financial year 2017-18 which has been enhanced to Rs 50,000 from financial year 2018-19.
Key aspects to consider while opting for a Family Floater Health Insurance Plan
Each family has unique health insurance needs and there is no one plan that fits all. It is thus advisable to do a thorough research before you pick a right health insurance plan for your family. There are some key factors that you should consider while opting for a Family Floater Health Insurance Plan.
- Adequate Sum Insured: When buying a family floater plan, it is essential to choose the sum insured or health cover wisely. You need to pick a sum insured that will fulfill your family’s treatment expenses. Considering the medical inflation, number of members insured, number of senior citizens covered, family history of a disease, etc. one should pick the health cover amount.
- Day Care Procedures: Insurance companies offer coverage for day care procedures and it is advisable to check the list of day care procedures covered under the plan chosen.
- Co-payment: It refers to a specific percentage of the claim amount, which have to be borne by the insured person. Choosing co-payment under the plan will help you to reduce the premium amount, but while picking a co-payment you need to check whether you can easily pay the claim amount from your pocket.
- Sub limits: The insurance company sets a monetary limit for the coverage available towards certain illnesses or treatments. If your medical bill is Rs 1.10 lakhs and the sub-limit for the specific treatment is Rs 40,000 then you need to pay the remaining bill amount of Rs 70,000 from your pocket. It is thus advisable to pick a sub limit after assessing the health condition of the insureds.
- Waiting Period: It is a time period during which insurer is not bound to pay for your claims. The insurance company will cover the illnesses/diseases after completion of the waiting period. You should check the conditions specified under waiting period section of the policy.
- Check Auto Restoration: Auto restoration facility will help to restore your health cover, in case it gets exhausted due to claims during a policy year. It is an important benefit in case of a family floater health plan. It is usually available without any additional cost. Under the family health plan, the sum insured is utilized by every member of the family and there are higher chances of its exhaustion. Thus, you should opt for a health plan that offers auto restoration facility.
- Look for NCB Benefit: No claim bonus (NCB) benefit is available in case of a claim free policy year. In case you are young and healthy and have your spouse and or your child insured under the policy, the probability of hospitalization reduces.This benefit helps you to lower the future premiums, so you should choose a family health policy that offers NCB benefit.
- Choose Additional Covers with Prudence: There are several add-ons available under a family floater health plan, but you need to choose the required add-ons/ riders based on certain factors. The additional cover is available at an extra cost, so be wise in picking the one.
- Read Policy Terms and Conditions: When you are looking to buy a health plan, you are advised to go through the policy terms & conditions thoroughly and check inclusions & exclusions applicable under the policy. So, you will be known all about the policy benefits before buying.
Best Family Floater Plans in India 2020
|Plan Name||Minimum Entry Age||Sum Insured||Pre Existing Diseases||Co- Payment||No Claim Bonus||Pre & Post Hospitalization|
|Care||Child: 91 days, Adult: 18 years||3 Lakh to 75 Lakh||Covered after 4 years||Applicable||Up to 150% of SI||30 & 60 days|
|ManipalCigna ProHealth Plus Plan||Child: 91 days, Adult: 18 years||4.5 Lakh to 10 Lakh||Covered after 4 years||Applicable||Up to 100% of SI||60 & 180 days|
|Star Family Health Optima||Child: 16 days, Adult: 18 years||3 Lakh to 25 Lakh||Covered after 4 years||Applicable||Up to 100% of SI||60 & 90 days|
|Aditya Birla Activ Health Enhanced Plan||Child: 91 days, Adult: 18 years||2 Lakh to 200 Lakh||Covered after 3 years||Applicable||Up to 100% of SI||60 & 180 days|
|HDFC ERGO Health Optima Restore Plan||Child: 91 days, Adult: 18 years||3 Lakh to 50 Lakh||Covered after 3 years||Not Applicable||Up to 100% of SI||60 & 180 days|
Drawbacks of Family Floater Health Plan
Sharing: As a family floater health plan offers sum insured which is shared by all family members. In case a family member has utilized a part of the sum insured, others will have a lower cover remaining for that year. If the multiple family members are hospitalized during a policy year, you may fall short of sum insured available.
Cost: In family floater plans, the premium amount is calculated based on the age of the eldest member. As, the eldest member gets older, the premium will shoot up. It’s always beneficial to opt for a family health plan with young members that will help you to save on premiums and buy a separate policy for older members, say parents.
Renewal: This health policy will only be renewed till the eldest member reaches the maximum age of renewability, as applicable under the policy terms. At this stage, you need to take a fresh policy without the benefit of the earlier continuous coverage. In this scenario, it would be better to take individual policies for the family members.
As far as family health cover is concerned, having a family floater health insurance policy is the most obvious choice. There are a number of health policies available with insurers, but you need to choose a right one that will fulfill your family’s healthcare needs. Before buying a family health plan, you should compare the benefits & features available and then choose the best one.