Health insurance plans are offered in two variants – individual health plans and Family Floater (FF) plans. It is important to know the differences between the two types, before you invest in a policy. Both the policies have some advantages and drawbacks. Individual plans might be cheaper, but the sum assured is not sufficient for the person insured. Whereas, FFs are little expensive because they cover all the family members under one single sum assured.
FF gives you the benefit of making multiple claims for more than one family members. Whereas, if there is no claim is made in a year of individual health plans, you are eligible for a No-Claim Bonus (NCB) which gets carried forward to the next year. Individual covers are for one person only, so you would have to purchase separate plans for every member. However, you can insure all the family members under one FF policy.
Which Plan Should You Choose?
The premiums of the FF plans are based on the eldest member of the family. Hence, if the oldest member of family meets with death, the policy will be terminated and others won’t get the protection. Also, the renewals of FFs are offered only to a prescribed age limit in the policy. So, if any member misrepresent the information related to age which leads to a renewal, other members won’t be able to renew it.
- FF covers all the dependents of the earner of a family. So, if the dependent children become independent and are moved to individual plans in future, the benefits of FF won’t be transferred. Also, they miss out on credit for the waiting period.
- Family plans cover only close family members like partner, children and dependent parents. If you want to add an independent parent or your in-laws, you can purchase a separate individual health insurance.
- However, now the renewal of every policy under individual and family plans can be renewed life-long. The rates of the policies must be based on each family member and not only the eldest member. Also, credits of the previous policy must go with the policyholder if he/she decides to move one member to a new policy.
- With family plans you are relieved form the worries of managing multiple policies. Also, these plans are cheaper than individual polices and hence it is a good purchasing option for the young families. Individual policies are not valid for minors. Hence, in this case family policies are a better option since it covers for all members which includes minors too.
- Individual plans are purchased separately. However, it can be purchased for each of the partners, parents, and children. Hence, the amount of payable premiums is based on the age of each member and the sum insured is calculated by that. However, if there are more than one person insured at the same time, some insurance providers offer a discount of 10% on the total premium. Also, if one person asks for the claim, the other members can still claim in the future.
- One important difference between the two types of plans is the price of payable premiums. Suppose you have purchased an individual health policy of 5 Lakhs for a member of age between 30 to 35 years, the payable premium would cost around Rs. 12497 which includes a discount of 10%. However, for the same sum insured of 5 Lakhs, you would be paying a premium of Rs. 10416 in family plan.
If there is a history of severe medical issues for a family member, it is better to purchase an individual health plan for them. However, if you have a young family and there is no history of life-threatening diseases or symptoms, a family health insurance would be a better option.