Family Floater vs Individual Health Insurance


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Difference between Family Floater and Individual Health Insurance

While buying a health insurance plan, you will ideally have to choose between a Family Floater Health Insurance and an Individual Health Insurance.

The main difference between the two is that in a family floater health insurance, all family members are protected under one plan; this means both the premium and the total sum insured is shared amongst all family members; whereas an individual health insurance plan is dedicated to one person only, wherein the health insurance premium and sum insured is dedicated to one person only. 

We’ve often heard of the common phrase, “Health is Wealth”. Perhaps we didn’t take it to seriously as kids but as time goes by, the truth within those three words only strengthens as we grow older, and the world gets ahead of us with every passing year.

Moreover, the expenses in context to healthcare too seem to be getting only higher. This is probably also why there are so many more options today when it comes to securing our health with a health insurance plan; this not only helps us securing our health and wellbeing but, also allows us the leeway to be financially secure.

Since there are so many options today when it comes to health insurance, it can get overwhelming to make the right decision. One of the most common doubts we’ve learned people have in choosing the right health insurance plan is in picking the right type of plan.

Broadly, when it comes to health insurance, there are two types of health insurance plans available no matter which health insurer you pick, i.e. a Family Floater Health Insurance and an Individual Health Insurance. We believe in transparency when it comes to insurance.

After all, it’s such a crucial financial decision, and we’re here to help you in making the right one. Hence, we’ve put down everything you need to know, when it comes to understanding the difference between a Family Floater Health Insurance and an Individual Health Insurance. 

 

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Learn More about Individual and Family Floater Health Insurance

Individual Health Insurance

  • As the name suggests, an Individual Health Insurance is a health coverage that covers for a single individual; i.e it doesn’t cover you or your family members in one plan but gives you each a separate plan to cover for all health benefits. 
  • This type of plan works best if you want to protect your senior parents (since health conditions and consequently health expenses post a particular age grow twofold) or are only looking for a plan to protect for your individual health needs. 
  • Look up your yearly tax benefits and you’ll find that an individual health insurance (either for yourself and your family members or even your senior parents) makes it to the list, in strengthening not only your financial plans, but also helps protect your greatest asset, your health! 

Family Floater Health Insurance

  • A family floater health insurance is a type of health insurance plan that protects you and your family members under one plan; the annual health insurance premium and the total sum insured will be shared amongst all family members.  
  • Families in India are often stressed due to the financial burden that comes with today’s health expenditures. In such cases, a family floater health insurance plan can be a smart option for both financial and overall health.
  • For example; say your family floater cover is Rs 4 lakhs and you are a family of four members. Now if the need arises, any one member can use this entire amount of 4 lakhs in case of a medical emergency or all four members can use whatever amounts they require as and when the need arises, staying within the boundary of the sum insured, i.e Rs 4 lakhs. 
  • The point to note here is that if one person uses the entire sum insured, the others will be left with nothing to use. A family floater plan is flexible when it comes to using the insurance coverage for a group and especially beneficial and suited for couples and nuclear families.

Difference between Individual and Family Floater Health Insurance

Point of Comparison

Individual Health Insurance

Family Floater Health Insurance

Definition

An individual health insurance is a type of health insurance plan wherein only one person can be covered in each plan. This means, both the health insurance premium and sum insured is dedicated for one person only and cannot be shared.

A family floater health insurance is a type of health insurance plan wherein you and your family members share one plan. This means both your health insurance premium and sum insured would be shared amongst all members in the plan.

Coverage

This plan only offers coverage to the single individual insured in this plan. For example; If you’ve taken a plan of SI Rs 10 Lakhs, you alone will have up to 10 Lakhs to benefit from, for the entire policy period.

This plan offers coverage to all family members insured in the plan. For example; if your plan SI is Rs 10 lakhs, then the entire family will have to share this amount for the policy period.

Advantages

The biggest benefit of an individual health insurance plan is that the coverage is a lot more extensive since every individual has their own sum insured, unlike a family floater where the sum insured is shared amongst all insured in the plan. This especially works out well for senior parents.

The biggest benefit of a family floater plan is that the health insurance premium is cost effective, as the premium is a one-time premium for all family members.

Disadvantages

The single disadvantage of an Individual Health Insurance is that one will have enough to cover for them in one policy year. Additionally, even if they haven’t claimed during the year, they can benefit from a No Claim Bonus 😊

One of the main disadvantages of a family floater plan is that, the sum insured may not be enough for all family members.

Example

A 30 something working woman chooses to take an Individual Health Insurance plan for herself, and her senior father. She takes an individual plan each of up to SI 5 lakhs. This means, she and her father both will have 5 lakhs each to cover for their health needs throughout the year.

A couple with two kids chooses to go for a family floater health insurance plan; under these all four members will have to share the total sum insured amongst themselves. For instance; if they’ve taken a plan of SI 5 lakhs, then they can only use up to 5 lakhs for all their health claims during the year.

Preferred Choice

An individual health insurance is highly recommended for bigger families, or those with senior parents as a family floater may not be sufficient.

A family floater health insurance would work well for a young couple or a small and nuclear families.

Tips & Recommendations

If you’re going for an Individual Health Insurance plan, make sure you opt for relevant add-ons for every member too. For example; if you’re taking an individual plan for your parents then the AYUSH add-on would be a recommended add-on to include in your plan.

If you’re going to opt for a family floater plan, then opt for a higher sum insured since you’ll need to make sure that the total sum insured is sufficient for all family members.

 

Conclusion

While choosing one out of the two, the premium should not be the only thing to consider. In short, a family floater insurance covers the entire family in one policy and individual insurance provides coverage to individuals only. The right approach would be to target covering all family members and getting maximum benefits of both the policies. Do your research on both and zero down which one is best for you and your family.