A family floater health policy typically covers a husband, wife, and their two children. This means that if you purchase a health policy with a coverage of ₹10 lakh, your entire family will be covered under this policy.
In recent years, there has been growing interest in family floater health insurance. This allows all family members to be covered under a single policy, eliminating the need for separate policies for each member. The question is, is there an advantage in purchasing a family floater health policy over purchasing separate health policies for different family members?
Meaning of a Family Floater Health Policy
Typically, a family floater health policy covers a husband, wife, and their two children. This means that if you purchase a health policy with a cover of ₹10 lakh, your entire family will be covered under this policy. This policy is cheaper than purchasing individual policies. This is because insurance companies understand that the likelihood of multiple family members falling ill at the same time is very low. Therefore, they allow the use of a single pool of group funds.
This results in lower premiums.
Insurance companies allow the use of a single pool of funds for the entire family, spreading the risk, thereby reducing policy premiums. A family floater health policy is ideal for a typical family consisting of a husband, wife, and two children. This policy can save you thousands of rupees each year compared to purchasing separate coverage. However, it’s important to keep in mind that the policy’s sum assured is shared among family members.
Who is it beneficial for?
Suppose someone takes out a ₹10 lakh floater policy for their family. If ₹8 lakh is spent on treatment or surgery for one family member, they will have very little coverage for the rest of the year. Purchasing separate policies doesn’t present this problem. Secondly, the premium in a family floater policy depends on the oldest member of the family. Therefore, adding your parents to the policy will increase the premium significantly, making it unaffordable.
Significant savings on premiums
Family floater policies are beneficial for nuclear families. A nuclear family refers to a husband, wife, and their two children. If the couple is expected to live to be 20 or 30, the policy premium is significantly lower. Such a family can purchase a family floater policy with greater coverage at a lower premium. The premium for a ₹15-20 lakh floater family health policy will be significantly lower than a ₹5 lakh policy for individual family members.
