Indian Retail Health Insurance market for the customers have two major categories for each Health Insurance plan, namely : Individual and Floater plans.
If you are looking for a health insurance plan for family and simultaneously meeting your financial budget needs, then floater policies are the correct option to be opted for.
In fact, most of the families in India are using this option in majority cases, as one policy fits all of the individuals in India.
You also have to note that Indian Floater health Insurance plans are less costly in premium than in the US market.
What does the Health Insurance plan for family mean?
As you know Individual health plans cover only a single person for the said sum insured.
But in India, not all the people cannot afford to spend several thousand for insurance cover for all their family members.
Hence, the concept of Health Insurance plan for family came into the picture.
You should also note that group health insurance and floater plans are different.
Group health insurance is offered to corporates, employers, etc who in turn use it to provide health insurance cover for their employees.
Floater plans will have limited family members to be covered, whereas group health insurance covers higher numbers of people in a single plan.
For Eg.: Due to the Corona pandemic, my college purchased a group health insurance cover for all the students currently admitted in different programs via TATA AIG Insurance company.
The policy cover was around 2 crore. I could not get the premium amount details, but the total people covered in the policy were around 400+.
You could now be able to tell the difference between a group and a floater plan.
What are the general features of health insurance plan for family in India?
In the majority of the health insurance plans, there is no major difference in features of the policy, except for a minor change in coverage amount and the premiums of the policy.
The major reason you could see people opting for a health insurance plan for family in India is the PREMIUM.
Yes, since a single cover can cover all the members of a family, most of the family opt for this.
Also, note that only blood related family members are eligible to be included in the floater plan.
But, I could see that some policies provide cover to son in laws, employees under them, etc.
To be on the safer side, always try to cover only yourself, your spouse and your children.
If you plan to include your parents or parents in law, check their age eligibility and health condition. If it is affordable for you, consider choosing a separate cover for them.
Why because, the older people will have a high chance to get admitted for their age and health problems if any..
Also, do you know what should be on your checklist before buying a health insurance for cancer.If not, click here to read about it.
If they are included in your floater plan, and in case they get admitted due to some health reasons.
Then you will file for a claim from the insurer.
By any chance, if there is some other family member who has been hospitalised then either you would have less cover or you could file for another claim as the sum insured would be exhausted.
There are many sub-limits to the point I had mentioned above, but this is a general view on what would happen.
And, the mistake people do here is they either take a inadequate health insurance cover or cover more number of people in the family health plan
Let’s one by one..
Errors made in choosing mediclaim policy for family
Concept of Family members covered
If you checked the brochure of mediclaim policy for family, they will mention that they will cover your wife, children, parents, parents in law, son/daughter in laws, siblings, etc.
I was surprised to see some companies are also including employees under the individual also in the people allowed for cover.
But, here’s the catch..
If you checked the policy wordings document, they will mention something as 2A + 3C, 4A + 2C, etc.
And they will quote that only two adults can be included under the plan and the children.
You could see the anomaly here right, even though they mention several members eligible, only a certain number of people can be covered.
So, you got choose wisely who do you want to include or exclude in a family health insurance plan
Check out my article on what are the Types of Health Insurance Plans available in India here.
Age cut-off for children
In health insurance family floater plan, they are mentioned as ‘dependent children’ and not as children covered.
This means that your children if they are earning on their own, they can’t be covered beyond a certain age.
This age cut- off ranges from 18 years to 30 years depending on the policy.
Once your children attain the maximum age cut-off, they will be offered to be shifted to a separate individual policy within their company, exit the plan or transfer the policy with accumulated bonus, etc to another company.
The main risk here is, on transferring to a new policy either within the same company or another company, the children should disclose all the health status without missing them out.
The premium for a children individual policy cover is the lowest priced in all sum insured ranges.
So, if you could afford to shift them as early as possible to a separate plan rather than waiting for them to attain their maximum age limit.
Because in between if some health issues happened, then it will become a PED and premium loading will happen.
How the premiums are decided in a family health plan?
The insurer’s will calculate depending on the age of the eldest individual covered in the plan and calculate the premium.
For eg.: There are two kids with you, your age is 25 and your wife’s age is 27. Even though you had taken the policy, and covered your family members under it.
The policy premium will be calculated based on your wife’s age of 27, and not based on your age 25, since you are younger.
This is another grey area people miss.
So if you add your parents of the older age group, you could figure out the multi-fold increase in premium right.
The variations in policy features of family health insurance
You have to double check that the room rent limits are not having any sub-limits and check if there are several sub-limits for a floater in the policy.
If there are way too many restrictions, shift to another company plan.
Also, most policies come with restoration of sum insured these days.
Do check this feature also, if it is there..
The main advantage, if your sum insured is exhausted, there will be automatic loading of sum insured for the same amount, but it can’t be used for the same illness.
Majority policies give 100% restoration of sum insured, but there are restricted percentage or years of restoration feature in policies of lower sum insured.
Do keep the above thing in mind while choosing one.
Should you opt for additional riders in a family health plan?
Yes & No..
Just check the situation you are in.
FOr eg.; Some policies give personal accident cover as a rider (rider is an optional cover, for extra premium).
If you can’t afford a separate policy, just pay additional premium to include it in your family health insurance.
After this covid pandemic, as per policybazaar internal analysis it was found that a customer spends around 90 mins online before choosing a health insurance cover.
People are realizing the importance of health insurance nowadays, but if they understood how the plan features work before finalizing an option.
It would come in handy during filing for a claim in future.
Rest assured, I will make a part 2 of this post If I have found any points missed in this one.
Meanwhile, you can read my previous article on ‘Why not to choose Health insurance plan for senior citizens’ here.
See you on my next post.
Do comment what are thoughts about the article or if you have doubts in the comments section below.