Family or individual health insurance: what to choose? | Photo credit: BCCL
New Delhi: The coronavirus pandemic has taught people the importance of having strong health insurance coverage. With the increase in the cost of medical treatments, awareness of health care and related expenses has increased, which has led people to actively purchase health insurance plans. However, when purchasing a health policy, people are usually confused between the individual health plan and the family floating policy.
These two insurance plans are compensation plans, that is to say they reimburse the actual expenses incurred during hospitalization up to the amount insured by the specific plan. The sum insured is the maximum amount that an insurer undertakes to reimburse or claim subject to the conditions of the policy. An individual policy means separate insurance coverage for each family member with defined coverage. However, in a floating family health insurance plan, the sum insured limit can be used by any family member.
For example, if your health insurance plan is Rs 5 lakh, then in a medical emergency any member can use that total amount. A family floating plan offers a higher sum insured compared to individual health insurance plans. There are floating family plans that cover dependent parents, siblings as well as the individual, spouse and children.
In the case of an individual plan, there is a dedicated insured capital while, in a floating family plan, the insured capital is shared. This means that at the time of a claim by one of the family members in a family floating plan, the coverage is reduced. During any unforeseen event, where all family members need health insurance coverage, this plan will be insufficient to provide financial support for everyone.
In an individual policy, the plan must be purchased in the name of that particular person (such as a spouse, children, parents, etc.). The policy premium will be decided based on the age and sum insured of each individual. However, in a floating family plan, several members can be covered by the same plan. Thus, in an individual plan, there is a dedicated sum insured while, in a floating family plan, the sum insured is shared.
An individual policy is relatively expensive compared to the floating family health plan. Premiums for floating family plans are determined by the age of the oldest member, who must be insured. However, in the case of an individual policy, the age of the applicant is taken into account.
Insurer renewals are only available up to a certain age. This means that if the oldest family member, who is covered by the family floating plan, exceeds the maximum renewal limit, then no other member will be able to defer the policy.
Generally, it is believed that the family floating plan will be insufficient during any unforeseen event, where all family members need health insurance coverage.
Family health insurance vs. Individual health insurance: what to choose?
There is no one option that works for everyone. When choosing a health insurance policy, you should consider covering elderly members or a member who may already be suffering from an illness with individual health policies so that they are properly covered for their particular needs. . For the rest, young and healthy people can opt for a family floating policy. Thus, cost should not be the only factor to consider when choosing health coverage.
Remember that in the case of a floating family plan, the premium will generally depend on the age of the oldest member of the family covered. So if you take a family float for you and your parents. Then, in this case, the premium will depend on your father given his age and medical complications, the premium will be higher.
Also, another thing that should be kept in mind while opting for a floating family policy is that the policy ends in the event of the death of the primary insured. In such a scenario, others will then be without coverage and will have to purchase a new health policy.