Family Floater Plans – A Quick Overview

What is Family Floater Health Insurance?

A family floater health insurance plan provides coverage to all family members under a single policy, eliminating the need of buying separate plans for each family member. All the covered family members share the same sum insured and a single premium is paid for the policy. This makes buying family floater health insurance a convenient and affordable choice.

In most family floater plans, the proposer can add only immediate family members like their spouse and dependent children. Some plans also allow adding dependent parents and in-laws, siblings, or even extended family members.

List of Family Floater Plans

It is important that you compare multiple health insurance plans for family at an online insurance aggregator portal to evaluate different plans based on their specific features, benefits, limitations and premiums. The below table provides some family floater plans that you can consider:

*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 ₹5 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 ₹3 lakh. The amount gets reimbursed by the insurer. Now, the entire family has ₹2 lakh remaining as their health insurance coverage that they can use during the same policy year.

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 ₹7 lakh. The insurance company reimbursed the sum insured in full i.e. ₹5 lakh and Mr. Sharma ends up paying the rest of the amount i.e. ₹2 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 themselves and their entire family under one single plan which is quite 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 rather than taking 4 individual health plans for 4 family members separately.

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 as most family health insurance plans offer maternity benefits as an in-built feature or through optional cover.
• These plans provide income tax benefits under Section 80D of the Income Tax Act, 1961, if opting for the old tax regime.
• It is easier to get the immediate family members, spouse or new-borns, added in a floater policy.
• In case of younger families, chances of more than one claim are not much. Hence, the family 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 a 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.
• The premium for a family floater plan is determined by the age of the eldest member, thus older the age of the eldest member, the higher the premium for the entire family.

However, one must remember that family floater plans are usually ideal for younger families, where members are healthy and less prone to health risks. Families with elderly parents must prefer buying separate health insurance for senior citizens to ensure they have adequate coverage as they are more prone to illnesses and injuries with increasing age.

Who Should Buy Family Floater Health Insurance?

Family floater health insurance is ideal for:

• Small & Young Families - Young couples with 1 or 2 kids can opt for family health insurance plans since the chances of large or multiple claims are lower as the couple as well as kids have lower health risks.
• Healthy Families - If no one in the family has chronic conditions or serious ailments, the probability of frequent hospitalisations or large claims is lower. Hence, the shared sum by all members can be sufficient in such a situation.
• Families Looking for Affordable Options - Since the premium for family floater health insurance is lower than the combined premium for separate individual policies for each member, people who want cost-effective coverage can opt for family floater plans.
• Families with Similar Aged Young Members - The premium for a family floater plan is calculated based on the age of the oldest member. With similar aged young members, you will also not have to pay a higher premium due to the age gap. Even the health risk levels are also similar in such a group, hence sharing sum insured does not become risky.

Pro Tip: Family floater plans should be avoided if adding elderly parents to the plan or if any one in the family has serious, chronic conditions.

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 – Earlier, most insurers had set the upper cap on entry age from 65 to 75. But now with the new IRDAI guidelines, most of the insurers offer lifelong renewability.
• Check the Sub-limits – Always check the sub-limits or restrictions on coverage before opting for a plan. For instance, a health cover with the sum insured of ₹4 lakh can have a sub-limit of ₹40,000 on medicines or ₹1 lakh on modern treatments, meaning you can avail of only the capped amount as insurance and will have to pay the rest from your own pockets.
• Policy Term – Health plans used to be offered as annual policies. But now many insurers offer health plans with two or three-year policy terms.
• Reinstatement Benefit – This is one of the most important benefits of health insurance. Generally, the sum insured on a plan is fixed during a policy term. The insured may feel helpless if the sum insured is exhausted before the policy term (the chances of which are more in family floaters). The reinstatement (restoration of the sum insured) feature refills the sum insured if it is exhausted before the end of the policy term.
• Value Added Features – Look out for new-age features or add-ons, including free healthy check-ups, concierge services, unlimited teleconsultations, discounts on gyms, health clubs and fitness centres.

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, restoration benefits, etc. to make sure the family mediclaim policy meets the healthcare needs of all family members.