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Confused between individual and family floater plan? Know which one is better for you

New Delhi: A health insurance plan is among the most important must-haves, as people nowadays are more concerned about their well being. With the rising cost of medical treatment, awareness of healthcare and related expenses has increased which is why people buy health insurance plans.

However, while buying a health policy, people are usually confused between the individual health plan and family floater policy. Both of these plans are indemnity plans meaning they reimburse the actual expense incurred during hospitalisation up to the sum assured under the specific scheme. It may be noted that the sum assured is the maximum amount in which an insurer agrees to reimburse or claim subject to the policy conditions.

For instance, if the sum assured in your policy is Rs 4 lakh and your hospital bill is of Rs 50,000. The insurer will pay Rs 50,000 and the balance of Rs 3.5 lakh will remain unutilised. This remaining amount can be used for any other hospitalisation during the coverage period. An individual policy means a separate insurance cover for each family member while in case of family floater health plan, the sum assured in the policy can be used by any of the family members. For example, if the sum assured in your health insurance plan is Rs 3 lakh, then during any medical emergency, this entire amount can be used by anyone member of the family.

In an individual policy, the plan has to be bought in the name of that particular individual (such as a spouse, children, parents, etc). The premium of the policy will be decided as per the age and sum insured of each individual. However, in a family floater plan, more than one member can be covered under the same plan. So, in an individual plan, there is a dedicated sum insured whereas, in a family floater plan, the sum insured is shared.

However, the family floater plan will be insufficient during any unforeseen event, where all the family members require health insurance cover. It is important to note that the individual policy is expensive as compared to a family floater plan. The premium in a family floater policy is determined on the basis of the age of the oldest member, who has to be insured. While the age of the applicant is considered in an individual policy.

The advantages of a family floater plan are it is cheaper than the individual policy plan especially when it comes to senior citizen’s health plans. The entire sum assured can be used by anyone of the family members who fall sick and needs to be hospitalised. Another advantage is that the family floater plan qualifies for the benefits under Section 80D, of the Income Tax Act.

However, there are certain disadvantages also with family floater plan such as the insurers offer renewals up to a certain age only. If the senior-most member in the family, covered in the family floater exhausts the maximum ceiling of renewal then no other member will be able to carry forward the policy. Apart from this, very few insurers cover grandparents or in-laws along with the children, spouse, and dependent parents. Therefore, one needs to buy a separate policy for them.

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