A medical illness may strike unannounced. Have you considered how you will finance the treatment costs in case of a medical condition? As medical costs increase, it becomes difficult to meet treatment expenses in case of a critical illness.
Therefore, it is important to procure health insurance to ensure you are able to treat a medical illness without facing any financial difficulties. Health plans are available for individuals, groups, or as family floater insurance.
Let us compare health insurance plans for individuals and families. Each of these plans has their pros and cons and making the decision requires a detailed analysis.
Individual health plans
These plans provide insurance cover to the insured individual. Therefore, if you avail of an individual plan for INR 5 lakh, the insurance company will compensate you up to the sum assured in a year, in case of a covered illness.
Family floater plans
Such plans provide umbrella coverage to you and your family members, which include your spouse and children. Some plans may include parents and siblings under the same family plan. The coverage under the health plan may be used by any of the covered members during a year.
Here is a comparison between individual and family health insurance plans.
If you buy an individual plan for each member of your family, the total premium costs will be higher. In comparison, the premium paid for a family floater plan is more affordable. Therefore, if you choose a family health plan, you will be able to save money through a lower premium cost.
Sum assured usage
You may use the total sum assured under an individual health plan during the entire policy term. However, the same is not available to meet expenses incurred to treat medical conditions of any family member. On the other hand, the total sum assured under the family floater plan may be used by one or more of the covered members. A maximum of up to the total sum assured may be used by any family member insured under the policy during the year.
The basic assumption for a family floater plan is that the probability of all the insured members being critically unwell during the policy term is low. Therefore, in case all the family members require hospitalization simultaneously (in the event of an accident), and then the medical expenses covered for their treatment will be limited to the maximum sum assured under the family floater plan.
When you choose a family floater plan, the renewal period and premium depends on the age of the oldest member covered under the policy. Most of the insurers restrict the maximum age under this plan to 60 or 70 years. Once the oldest member reaches this age, the plan is not renewed. The remaining members will have to purchase a new family health plan. In this case, any No Claim Bonus (NCB) accumulated under the previous policy is lost along with the waiting period lapse. Moreover, the new plan will be at a higher premium because the age of the remaining members would have increased since they first brought the family floater plan. Therefore, if your parents are over 50 years old, it is recommended you avail of a separate health plan for them.
Most insurance companies cancel the family floater plan in case of the demise of the oldest member. Such age and death restrictions are not applicable when you choose to buy an individual health insurance plan. Every member is covered under a different policy.
No claim bonus (NCB)
If you make a claim under the individual policy, it does not affect the accumulated NCB for other family members. However, when you file a claim under the family floater plan, the NCB for all insured members is affected.
If one of your family members is diagnosed with a critical condition or there is a pre-existing illness, which requires huge treatment expenses, opting for an individual plan is advisable. This is because if you include the person under a family floater plan, the total premium cost will increase. Moreover, the entire sum assured may be utilized towards his/her treatment cost, which puts other family members at a risk of no coverage due to the exhaustion of the maximum limit.
Children age restriction
In case of a family floater plan, insurance companies do not offer coverage to children once they reach the maximum age limit, which varies from one company to another. Therefore, the children will then have to purchase separate individual health plans for continued coverage.
This is not a limitation when you opt for an individual plan because every person is covered under a separate policy. Therefore, children reaching the restricted age do not affect your health coverage.
It may be seen that individual plans may seem more beneficial than a family floater. However, health insurance benefits are available under both an individual and family floater plan. However, the choice between the two is based on your individual requirements and situation. You must evaluate your needs depending on the age and health conditions of self and all family members.
You may research more about these plans online. You may also seek advice from an experienced health insurance expert who may recommend the most appropriate plan based on your personal needs.