If you’ve been searching for a comprehensive health insurance plan, you probably know by now that insurance providers generally extend two broad options. You could pick an individual health policy or you could choose a family floater option. And while both plans offer comprehensive coverage, there are subtle differences between the two products. So in this article, we will parse through these subtleties and see if you should be choosing a family floater option as opposed to an individual health policy.
Understanding family floater health insurance plans
A family floater policy is designed to cover you and your family under a single umbrella contract. You can include yourself and your dependents under the same plan and pay a single premium for combined coverage. However, most insurance providers have a rather narrow definition of what dependents actually mean. And they only let you include your spouse and kids alongside yourself when buying a family floater option. If you have parents and siblings, who you also intend to cover, you may not be able to do so under a family floater plan. But despite this restriction, it is an efficient and economical option if you’re looking to cover multiple members in your family and here’s why
Benefits of a family floater option
- It’s operationally less intensive - As opposed to buying and maintaining multiple policies for each individual, you can have a single policy that accounts for your entire family
- It’s relatively inexpensive - If you’re picking an individual plan for each member of your family, then the premiums could be prohibitive. However, if you’re including them in a single plan, your premiums will be substantially lower
- If you plan to insure your kids under the age of 18, you may not have many options besides including them in a family floater plan
- It generally extends all the benefits that individual health policies extend.
- Insurers generally extend a family floater option with most policies they market
Downsides of a family floater option
- It may not offer sufficient coverage - If you’re picking a relatively low cover, then there’s a very real possibility that it may not extend sufficient protection if multiple members in your family are hospitalized in the same year
- Additional restrictions on kids - Most plans will force your kids out of the family floater plan as soon as they reach a certain age. It could be 25, 28, or 30, depending on the insurance provider
- You can’t include your parents, sibling and other extended family members of your choosing under a family floater option
- If you accidentally forget to pay your premiums on time, your entire family will loose protection
Differences between a family floater option and an individual health policy
Each option has its merits. And depending on a specific use case it may be prudent to pick one option over another. So here are a few things to consider while choosing between an individual policy and a family floater option
Individual health policies generally extend more comprehensive protection when compared to a family floater option. Consider for instance you are a family of 4 and you spend most of your time living together in the same household. In such an instance, the risks can be correlated. If covid affects an individual in the family, it’s possible it might infect everyone involved. If you’re involved in an accident, it’s likely that you’ll also have your family and kids alongside you. When tragic events do transpire you may have to witness multiple hospitalizations at the same time. And it’s imperative to have adequate protection as illustrated in the two cases below
- 10 lakh family floater plan: If you make 3 claims during the same year, each totalling 5 lakhs, then the family floater will only cover 2 members. It will pay out 5 lakh to settle the first claim and 5 lakhs to settle the second claim. However, since you’ve exhausted the full 10 lakhs by now, you’ll have to pay the remaining 5 lakhs out of pocket
- 3 individual plans with a sum insured of 10 lakhs: If you make 3 claims during the same year, each totalling 5 lakhs, then the individual plans will pay out 5 lakh each, when the claims do arise. In effect, you won’t have to pay anything out of pocket.
Family floater plans are generally more affordable when compared to individual health policies as illustrated in the use case below
- 10 lakh family floater plan: A healthy family of 3 between the ages of 48, 44 and 19 will pay an annual premium of roughly Rs. 23,000 for a 10 lakh family floater option
- 3 individual plans with a sum insured of 10 lakhs: A healthy family of 3 between the ages of 48, 44 and 19 will pay a combined total premium of 42,000 for 3 individual plans with a 10 lakh cover
3. Operational Intensity
If you’re buying a family floater plan, then you’ll only have to fill out the application once, submit a single proposal form, pay your premiums all at the same time and receive updates associated with a single plan. This helps ease the operational load and it’s unlikely you’ll forget to pay your premiums on time
If you’re buying several individual insurance policies, you’ll have to fill out the application multiple times, submit multiple proposal forms, pay your premiums multiple times and receive a whole host of updates associated with all the different insurance policies you hold. This could be an operational nightmare and if you’re single-handedly responsible for keeping all the documents in order, it’s possible you may forget to pay your premiums also.
Best Family Floater Health Insurance policies in 2023
- HDFC Ergo Optima Restore: Optima Restore’s family floater is one of the most popular products within Apollo Munich’s stable (now HDFC Ergo). It offers comprehensive cover. It protects most bases. It’s economical. It doesn’t have any unsavoury conditions. And it offers a whole host of benefits that are particularly useful. All in all, a solid pick.
- Star Health Comprehensive policy: As the name suggests, Star Comprehensive policy is a pretty comprehensive product. And it’s especially useful if you have family members who may have pre-existing conditions, since the policy starts covering these illnesses after only one year i.e. if you are willing to pay a little extra of course. The policy also offers dental and OPD benefits up to a certain limit. All in all, a good pick for a family.
- Niva Bupa Reassure (Max Bupa Reassure): Max Bupa Reassure offers unlimited restoration. So if you or another member of your family has to make a claim, you can always rest assured that the cover will restore itself in full each time you make a claim. A particularly useful feature if there is a risk correlation.
How are premiums calculated in a family floater plan?
Premiums in a family floater plan are incumbent on a whole host of factors. And depending on the specific use case and the insurance provider you choose, your premiums can vary considerably. So here are a few things that we know affect your premiums in a big way
- Age: The premiums in a family floater plan are primarily dependent on the age of the oldest member in the policy. If you have two parents and a child enrolling in a family floater plan, then the premiums will be calculated after taking into account the age of the eldest parent.
- Lifestyle: Lifestyle habits including smoking and drinking can have a bearing on your premium since they are known to induce crippling disease in both young and old people
- Pre-Existing Diseases: If multiple members in the family floater plan have pre-existing diseases, then the insurance company will impose an extra charge called (loading charges) on each individual and your premiums can rise by a substantial margin this way
- Location: Insurance companies often create a separate premium chart for different locations based on the healthcare costs in the area and the general state of health amongst the population. So if you’re in a tier 1 metro you probably will have to pay a higher premium, as opposed to someone staying in a tier 3 city.
- Add ons: Many people also include add ons with their family floater plan to extend the scope of their coverage. For instance, you could include an inflation hedge with your plan and the insurer will increase your cover by 5-6% each year to account for the added healthcare costs you may be expected to incur as each year passes by. However, do note that these add-ons can increase your premium by a substantial margin.
How to make a claim if you have a family floater plan?
- In the case of emergency hospitalization, you have to intimate the insurer or make the claim as soon as you get the patient admitted. In the event that isn’t possible, you must intimate the insurer within 48 hours of hospitalization.
- In the case of planned treatment, you have to intimate the insurer 3 days before admission. But if you can do it sooner, you should probably consider doing that as insurance companies may take a while to investigate the veracity of your request.
- Check for partnered hospitals — Each insurer will have a dedicated network of hospitals they’ll have partnered with. Once you find a partner hospital of your liking, you can try to make the claim on a cashless basis. That is to say that the hospital will directly communicate with the insurer and bill them without asking you to pay anything out of pocket
- If you try to make a cashless claim, you will have to fill a Pre-Authorization Request Form.
- The form will be made available to you once you intimate the insurer that you will be making a cashless claim. You’ll have to fill in your personal details and the hospital will fill out the rest. Once complete, you can ask the hospital the submit this form back to the insurer.
- Upon receipt of this form, the insurer will validate your claim and approve a sum that will be paid out on a fully cashless basis. In the event the treatment costs exceed this sum, then you’ll have to pay the difference and seek reimbursement once you’re discharged.
- If you don’t find a network hospital of your liking or if the cashless claim doesn’t pass, then you may have to file for reimbursement — wherein you pay the full cost of treatment and ask the insurer to reimburse you afterwards
How to file for reimbursement if your cashless claim doesn’t get approved?
- Oftentimes insurance companies may be tentative to settle a claim on a cashless basis but will gladly do so once you’ve paid the bill in full. This process is called reimbursement
- To file a claim, you will need to download the claim form from the insurer's website. Some insurers will also have an online portal for submission.
- The claim form is divided into two parts — Part A & Part B. You’ll have to fill out Part A and the hospital personnel will fill out part B. They’ll also have to sign and seal the document
- In the meantime, you have to collect and collate all the investigation and medical reports associated with your prognosis
- And finally, you will have to mail the original reports to the insurance company and wait for them to process your claim
What documents do you need while making a claim with a family floater plan?
- Investigation and Medical reports: You will need investigation reports signed by your physician and approved by the hospital
- Discharge Summary: A discharge summary will include further details about your diagnosis, treatments extended and the protocols followed to effectively treat your condition. The discharge summary must be printed on hospital letterhead and include all relevant data, such as the hospital’s address, license number, and contact specifics.
- The final bill: An itemized bill that includes expenses incurred across the board. It must have specific breakdowns, detailed statements and also include consultation charges
- Invoice details: Medical implants and other consumables must be supported by the invoice associated with the products.
Frequently Asked Questions
Can I switch from a family floater policy to an Individual health plan?
Yes, you can make the switch from a family floater to an individual policy. You have to intimate the insurer during the porting window - Usually 45-60 days before the date of renewal.
Is there a family floater plan that will allow me to include my parents?
Yes, there are a few plans that will allow you to include your parents. However, the premiums will be disproportionately high in such cases and you would be well advised to stay clear of such plans
Can I avail a discount on the family floater plan?
Some policies do offer a discount on the family floater option. You will have to consult the insurance company to know of such schemes
Do family floater plans have entry and exit conditions?
Yes, family floater plans will have entry and exit conditions. And more often than not, you won’t be able to include kids after they reach a certain age threshold