Family Floater Plans – A Quick Overview

List of Family Floater Plans

Before opting for a family health insurance plan, one must get and compare quotes from an online insurance portal like Policybazaar.com. Online comparison helps people choose a plan according to their specific features and benefits. Here are some family floater plans offering a gamut of coverage options.

*Disclaimer: The list mentioned is according to the alphabetical order of the insurance companies. Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by any insurer. This list of plans listed here comprise of insurance products offered by all the insurance partners of Policybazaar. For complete list of insurers in India refer to the Insurance Regulatory and Development Authority of India website www.irdai.gov.in.

How Does a Family Floater Plan Work?

Let us understand the working of a floater health insurance policy with the help of an example.

For instance, Mr. Sharma opts for a family floater with a sum insured of ₹3 lakh. The plan covers him, his spouse and two children. He pays an annual premium of ₹6,000 for the plan. There are two possible scenarios:

Scenario 1 – Mr. Sharma's wife contracted an illness and had to be hospitalised. The total expenses incurred on her treatment turned out to be ₹2,50,000. The amount gets reimbursed by the insurer.

Scenario 2 – The whole Sharma family contracted severe stomach infection caused by contaminated drinking water. All the four family members were hospitalised. The total expenses incurred on the treatment turned out to be ₹4,50,000. The insurance company reimbursed the sum insured in full i.e. ₹3 lakh and Mr. Sharma ends up paying the rest of the amount i.e. ₹1.5 lakh out of his own pocket.

Notably, the chance of getting the entire sum insured exhausted within the policy term is less because the probability of the whole family getting hospitalised within a single term is quite low.

Benefits of a Family Floater Health Insurance Plan

The biggest perk of a floater policy is that the policyholder gets to take care of himself and his entire family under one single plan which is quite obviously easier to manage than managing 4-5 individual policies.

In fact, from the perspective of a regular married man with two kids, it seems only wiser to get a family floater with a sum insured of ₹4,00,000 rather than taking 4 individual health plans for 4 family members separately.

Moreover, when it comes to getting parents insured, family floater stands out as a much cheaper option than getting a senior citizen health plan.

Some of the other benefits of a family floater medical insurance policy are:

• Floater is a more lucrative option when it comes to maternity coverage.
• These plans provide income tax benefits under Section 80D of the Income Tax Act, 1961.
• It is easier to get the immediate family members, spouse or new-borns, added in a floater.
• In case of younger families, chances of more than one claim are not much. So the member making the claim can avail of a greater sum insured at a lesser cost.

What is Not So Good About Family Floater Plans?

• The obvious turn-off in a floater is that in case of more than one claim within an year, the member making the subsequent claim has to do away with a thinned out cover (left out of the amount realised for the first claim).
• Most of the floater plans available in the market cover only the policyholder, their spouse and children, while excluding parents and siblings.
• A family floater plan can only be renewed till the oldest member reaches the maximum renewability age.

What to Look Out for While Buying Family Floater Plans?

People should look out for the following while investing in a floater health plan:

• Maximum Renewability Age – A while ago, insurers had set the upper cap on entry age from 65 to 75. But now with the intervention of IRDA, most of the insurers offer lifelong renewability.
• Check the Sub-limits – Do not get deluded by the heavy sum insured offered in a health plan. Always check the sub-limits for sub-categories before opting for a plan. For instance, for a specific health cover, the sum insured may be ₹4 lakh, but there could be a sublimit of ₹40,000 on medicines and ₹50,000 on pre and post hospitalisation.
• Policy Term - Health plans used to be offered as annual policies. But now many insurers offer health plans with two or three-year policy term.
• Reinstatement Benefit – This is one of the lesser known benefits of health insurance. Generally, the sum insured on a plan is fixed during a policy term. The insured finds himself in lose-lose proposition if the sum insured is exhausted before the policy term (the chances of which are more in family floaters). The reinstatement feature gets the sum insured refilled if it is exhausted before the end of the policy term.
• Value Added Features – Look out for add-ons such as free healthy check-ups, concierge services, 24 X 7 free medical advice on telephone, discounts on medical stores, health clubs and fitness centres and lots more.

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The Bottom Line

Family floater health plans offer an effective way to provide health coverage for the entire family under a single premium, making them a convenient and cost-effective option. For families with younger members or those in relatively good health, a floater plan can be more affordable and simpler to manage than multiple individual policies. However, buyers should consider certain factors like sub-limits, reinstatement benefits, etc. to make sure the mediclaim plan meets their family's needs.