What Is Family Floater Health Insurance? Medical emergencies are known to drain hard-earned savings in one go. Financial setbacks are unavoidable if you don't plan for such crises well in advance. This is where buying health coverage is recommended. But what if you have a family, comprising senior citizen parents, kids, and a spouse?
By Ramsy Swamy
Opinions expressed by Entrepreneur contributors are their own.
You're reading Entrepreneur India, an international franchise of Entrepreneur Media.
Medical emergencies are known to drain hard-earned savings in one go. Financial setbacks are unavoidable if you don't plan for such crises well in advance. This is where buying health coverage is recommended. But what if you have a family, comprising senior citizen parents, kids, and a spouse? Buying a separate cover for each of them could impact your pocket. That is where a family floater health insurance plan comes in.
Understanding Family Floater Plan
A family floater plan is a healthcare cover that, instead of covering an individual, secures the entire family's health under a single premium. The policy allows you to cover up to six family members who are your direct relations. For example, you can add your parents and parents-in-law, spouse, dependent children, and unmarried dependent children. If, during the policy period, you become a parent to a newborn, you are allowed to add your baby to the plan, usually after 90 days.
Any member can use the sum insured in this family health insurance plan without any restriction on the amount. Another thing to mention is that while computing the policy premium, the insurer considers the age of the senior member you wish to include in the plan.
How Does a Family Floater Plan Work?
Suppose you bought a family floater coverage of ₹15 lakh. The plan covers you, your parents, and your spouse. Your mother has a pre-existing cardiac disease. After a year of purchasing the policy, her health condition deteriorates, and the doctor recommends open-heart surgery. The total treatment costs, including surgery, medications, and screenings, came to around ₹12 lakh. In this case, the insurer will pay for all expenses (after considering deductibles, if any).
After a month of your mother's treatment, when you were commuting to the office, you met with an accident, and the injury was such that the doctor advised you to undergo knee cap replacement surgery.
The total bill for the surgery and associated expenses was ₹6 lakh. In this case, the insurer is liable to pay only ₹3 lakh, even though the plan covers the condition. The reason is that, as per the policy provision, ₹12 lakh has already been exhausted following your mother's treatment, and the remaining sum insured was only ₹3 lakh.
Things to Consider When Buying a Family Floater Plan
You must think of the following criteria before purchasing a family floater plan —
1. Reset Benefit
Read the fine print to check if the health insurance policy offers restoration benefits. It is a feature where, when any one or multiple members exhaust the entire sum insured, the insurer restores it to the original amount. However, many insurers only restore the sum insured if the treatment is for a disease that was not previously claimed in the same policy year.
For example, suppose you have a family floater plan of ₹5 lakh. You use the entire sum insured to treat a lung condition. If another hospital bill arises within the same period due to the lung condition, the insurer will not cover the cost.
2. Deductible Clause
A deductible is the amount that the policyholder needs to bear, and the insurer's liability arises after the deductible amount is cleared. For example, in a policy with a sum insured of ₹10 lakh and a deductible clause of ₹1 lakh, if the treatment bill comes to around Rs 95,000, the insurer won't be liable to pay anything because the claim amount is less than the deductible.
In another scenario, if the treatment expenses cost around Rs 1.2 lakh, the insurer will pay Rs 20,000.
There are two types of deductibles: voluntary and compulsory. A higher voluntary deductible can help you enjoy a lower premium.
3. Network Hospitals
Review the list of network hospitals. Opt for the policy with tie-ups with your city's top healthcare establishments. This point is important because you and other covered members can avail of treatment at an in-network hospital without paying anything from your pocket. The insurance provider pays the bill directly to the hospital.
4. Co-pay clause
Ensure the policy does not have any co-pay clause. As per this provision, if a claim arises, you must share a certain percentage of the total amount. For example, if the hospital bill is for ₹2 lakh and the co-pay clause is 40%, then you need to pay ₹80,000 out of your pocket.
5. Claim Settlement Ratio
This is another crucial consideration. This metric informs you of the number of claims the company has received in the business year and how many of them are actually settled. Go with the insurer that has a settlement ratio of over 95%.
Wrapping Up
A family floater health insurance plan is a smart choice to protect your family against medical emergencies. It covers the entire family under a single premium, making it cost-effective compared to individual plans. When choosing this plan, consider features like reset benefit, deductible clause, list of network hospitals, co-pay clause, and claim settlement ratio.
