Health Insurance: Pros and cons of a family floater plan

Here are some of the pros and cons of a family floater plan that you need to know about:

Healthcare costs all over the world, including India, have risen drastically over the last few years. Now only for the elderly, but healthcare has become expensive across all age groups. Even for newborns, couples have seen a sudden rise in their expenses.

For instance, other than the usual check-up expenses of the mother, normal delivery at a top hospital in a metro can cost anywhere between Rs 60,000 and Rs 1.5 lakh. Most health policies do not extend their cover for maternity costs, but a few policies include this expense in their cover, only after the waiting period is over, which ranges from 2 to 4 years. Industry experts suggest while buying a health insurance policy opt for one that includes maternity cover, especially for recently-married couples.

Additionally, note that with the inclusion of a child, the sum insured will increase and so will the premium of the policy. According to experts, policyholders should have a family floater with a sum insured of Rs 10 lakh or a minimum of Rs 5 lakh, given the rise of medical costs.

Here are some of the pros and cons of a family floater plan that you need to know about:

Pros

• Under a family floater plan, all members of a family are included in one policy, which is easier to manage than having separate policies. Hence, the policyholder gets to take care of the entire family in one policy.
• Family floaters are a cheaper option when getting insurance for parents than opting for a separate senior citizen’s health plans. As the elderly’s are more prone to sickness and disease, the premium for their insurance cover is quite high.
• With a family floater plan, it is easy to add a family member be it a spouse or a new-born. This, however, varies from company to company.
• With family floater plans, if one of the family members included in the policy gets sick and needs to be hospitalized, the total sum insured of the policy can be utilized by that member for his/her treatment.
• Family floater insurance plans come with income tax benefits under section 80D, of the Income Tax Act.

Cons

• Usually, family floater plans provide insurance coverage only for the immediate family of the policyholder, such as the spouse, and their children. Often it excludes the policyholder’s parents and siblings.
• In case of more than one claim within a year, the family member taking the second claim gets a thinned out cover. Hence, other members are only left with the leftover amount after the first claim.
• With family floater plans, as one of the family members included in the policy can use the total sum insured of the policy on hospitalization, the other members in the policy are left uncovered.
• One of the major drawbacks of a family floater plan is the renewability of the policy if senior citizen parents are also included in the family floater plan. Note that the family floater policy can only be renewed till the oldest member included in the cover reaches the maximum renewability age. However, with IRDAI’s intervention of IRDA, some insurers have started offering lifelong renewability in their policies.