A person in any age group needs health insurance and with increasing rates of premium in health insurance plans, it may not be affordable to people from all income classes. Moreover, in countries like India, children are dependent on parents even after their education is over and parents depend on their children for their financial needs in later stages of their life. This is where policies like family floaters and family health insurance plans
come to the rescue.
What is the family floater policy?
A family floater policy covers not only an individual but the family of the policyholder. This benefit is available on payment of a single premium and the sum assured is also shared by the family of the policyholder. It may also cover multiple hospitalizations of various family members.
Example: Mr. Agni took up a family floater policy of Rs. 10 lakhs covering himself, his wife, and two children. Now during the policy year, Mr. Agni was diagnosed with dengue and his hospitalization expenses came to Rs 3.5 lakhs. He put forward the claim and it was honored.
Now for the balance year, Rs. 6.5 lakhs can be utilized by any of the 4 family members. If in later part of the year, Mr. Agni’s daughter suffered from Malaria and her expenses summed to Rs. 1.5 lakhs, the claim can be made under the same policy.
Some policies also have a different variation of family floater policy where they have a separate cover for every individual of the family and then have an overall floating sum assured.
What are the benefits of taking a floater policy?
: Taking multiple policies could increase the out-of-pocket expense of an individual. Health insurance plans for family
members cover all your loved ones and are comparatively cheaper.
: It takes you out of the hassle of managing multiple policies of your family.
: Premium paid is allowed as a deduction from total income for calculation of income tax.
Who cannot be covered under a family floater policy?
As the floater policies are available for families, it is important to know how they define family and who cannot be covered under a family floater policy. Generally, every policy has its own definition of family, there are certain rules of inclusions and exclusions. Family can include spouse, children, parents, and parents-in-law. However certain policies limit the number of family members up to 2 adults while some policies may extend the limit up to 4 adults under a single policy.
Should you include your parents in your floater policy?
Floater policies have an age limit of 60 or 65 years depending on your policy provider. If your parents are beyond that age, they cannot be covered under the floater and you have to buy a separate policy for them. But if they are within the criteria yet it is advisable to buy them a separate policy due to the following set of reasons:
- Premium amount: As the age of the person insured increases, the premium amount also increases. Hence the amount of your floater premium may rise if your parents are covered within the same policy.
- Coverage on Diseases: Medical check-ups are necessary before taking the health insurance policy. If parents are currently suffering from certain pre existing diseases, the policy might not provide coverage for that range of diseases
- No Claim Bonus: If you don’t make any claim during the policy year then you may be given some bonus in the succeeding year. The chances of not making a claim are lower if you have elderly people covered along with you. This may lead you to not getting a no claim bonus and you may skip a potential saving in your cost.
Should you include your children in your floater policy or should you buy them a separate policy?
Family invariably includes your children but the question is should they be a part of your floater policy or should they have a separate policy. Here, the experts suggest that if the children are dependent, they can be covered under floater but if the children are independent financially, it is advisable to have a separate policy for them. This is because their requirement of coverage might be more and family floater policies with higher coverage are comparatively expensive. Also, they can enjoy the benefit of tax deduction from their income.
Floater policies are good for couples and children if they are younger. But it is up to an individual to decide whether to opt for an individual policy or floater policies.
1. Mr. Dheeraj asked, can I cover my wife’s parents in the family floater policy? She is not a single child and they are not dependent on her.
Yes, you can cover your in-laws in the family floater policy. It is immaterial whether your parents-in-law are dependent on your spouse or not.
2. Miss Riya asked, “Can I include my paternal uncle in the family floater policy? He is financially dependent on me”.
No, you cannot include your uncle or aunt in your family floater policy irrespective of whether they are dependent on you or not.