Health insurance is a very important investment for everyone and it should be prioritized for in a family's budget. Buying insurance does not necessarily mean that it will be a strain on the bread-winners pocket - especially if one considers a family floater policy.
The benefits of a family floater policy are many - one can include one's entire family in the plan, thus providing greater insurance coverage for everyone. The savings on the premium paid for a family floater policy is also significantly more as compared to buying individual health insurance policies for each family member. Also read Little health insurance premium that goes a long way

The Advantages:

1. Savings benefit: Family floater policies are advantageous because it allows for great savings. For example, if a family of four were to invest in health insurance policies for each family member to the tune of 2 lakhs each, their total premium would be far higher than if they opted for a family floater policy for the entire family for the price of 4 lakhs.

2. Flexibility of coverage: In times of need, a family member can utilize family floater coverage of 4 lakhs if required, whereas if that person had been individually insured for an amount of say, 2 lakhs, any extra expense would have to be paid out of his or her own pocket.

3. Beneficial for young couples: Young couples with children can avail of the saving benefits a family floater policy offers. Usually, floater policies can be opted for by a couple with two children though some policies allow a couple with a single child to add another child later to the plan. Also, it makes sense for a young family to invest in such a policy because the premium depends on the age of the senior most member of the family.

The Disadvantages:

1. Restricted renewal: These policies can be renewed for the entire family depending on the age of the senior most member - whose age also determines the premium. Once he/she reaches the maximum age defined for renewability (usually 65 to 70), the rest of the family members will need to buy fresh policies. Children, once they cross the age of 25 are also deemed ineligible for such policies. The earlier coverage will be declared null and void in both cases. The policy is also discontinued once the senior most member dies.
Most companies are trying to do away with this restriction by allowing the policy to be renewed without covering the oldest member whose policy cannot be renewed. Alternately, some companies like Max Bupa Health Insurance has launched policies that can be covered lifelong.

2. Risk factor: If one member of the family requires serious health care then chances are that he or she will utilize the entire coverage provided by the policy. This, or multiple family members needing health care at the same time, might drain the coverage provided by the policy entirely, thus leaving the other family members at a risk of paying for health care out of their own pocket, if needed, for the rest of the year.

There are some policies who has introduced a combination plan of individual + family floater in the same health plan so as to provide the benefit of Individual Coverage even if he Floater coverage has been used up by another member! Eg. Max Bupa Family First Plan.
So it seems that for young families, with a low risk factor, a family floater policy is the best deal where health insurance is concerned.

Written By: Deepak Yohannan

The author is the CEO of MyInsuranceClub.com, an online insurance price & features comparison portal

For more articles by Deepak Yohannan, please visit MyInsuranceClub.com

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