In India, all insurance companies offer two types of health insurance plans – individual health insurance policy and family health insurance policy. The individual health insurance plan offers protection only to a single person, i.e., the policyholder. You can purchase health insurance for yourself, spouse or anyone in the family.
Family health insurance, offers coverage to all the family members in a single plan, known as the family floater health insurance policy. This means you need not buy multiple medical insurance policies for your family members. Family members will be covered under single policy.
What is a family floater health insurance policy?
As the name suggests, a family floater health insurance plan is a type of health insurance under which you can offer health coverage to all the family members under a single plan and by paying a single premium. In a family floater health insurance plan, the sum insured is split between all the members covered under the policy. Buying a family health insurance plan is much more cost-effective than buying an individual health insurance policy for each family member.
How does family floater health insurance policy work?
Let us understand the working of a floater health insurance policy with an example of Miss Shreya Sharma.
Miss Sharma purchases a policy with a sum insured of Rs. 10 lakhs that covers herself, her spouse and children. Now, let’s assume, Shreya falls sick and needs to be hospitalised. Her medical bills amount to INR 4,00,000. After a couple of months, her elder child fell sick and also required hospitalisation, which cost her about INR 1,00,000. In this case, Miss Sharma’s health insurance policy will cover both the bills and she will still have Rs. 5 lakhs INR of the sum insured for the remaining tenure.
Benefits of buying a family floater health insurance plan
One of the most significant benefits of buying a floater health insurance policy is that it helps you save the hassles of maintaining multiple policies. One policy covers all your family members, including your extended family and in-laws.
If you do your maths, you would know that the premium for a family floater health insurance plan is cheaper than the premium for individual plans. Besides, these plans offer a large sum insured.
The sum insured of a family floater health insurance can be used by all members covered under the plan. This ensures that if two people in the family need medical care at the same time, you won’t face any fund shortage.
Some insurance companies offer sum insured reinstatement benefits. This means if you use the entire sum insured, you can restore 100% of the sum insured. Thus, even if you exhaust the coverage, you will still get compensation from the insurer for the medical expenses you incur.
Another important benefit of family floater health insurance is the tax benefit you get under Section 80D of the Income Tax Act. The premium you pay towards health insurance policy is eligible for deduction up to Rs. 1 Lakh from your total annual tax liability depending up on the age of the members insured under the policy.
Final Word
Thus, with such excellent benefits it is evident that a family health insurance plan is necessary for all. It gives you a peace of mind knowing that you can keep your savings protected and get compensation for all your medical expenses.