Weighing the pros and cons of a family floater plan

Insurance

oi-Sunil

By Sunil Fernandes

Published: Saturday, July 26, 2014, 10:34 [IST]

Everyone loves a good deal, and it is common knowledge that when a purchase is made in bulk, the features are high and the prices are low. The same logic also comes into play when buying insurance, but here it is known as a Family Floater Plan.

The thought behind it is quite simple. You know you need to protect your family against medical contingencies, so rather than buying individual plans for every member; it becomes more economical to have a comprehensive plan that covers each member of the family. Family Floater Plans are extremely popular because, as a family man, they help you get the maximum benefit for your money spent.

Principally, in a Family Floater Plan a single Sum Insured covers all the members of the family. This amount is available to anyone or to all members in case of any eventuality during the term of the policy. There are several benefits to buying such a plan. Besides being comparatively inexpensive, they are much easier to manage than keeping track of individual plans for family members. While renewing, you just need to remember a single date, instead of three or four dates in the case of individual plans.

You can also add another family member to the current policy with convenience. In a similar manner, if there is an the unfortunate demise of the senior-most member of the family, the other members of the family can continue with the floater without losing any benefits of the policy. Also in most cases, there is continuous and hassle free coverage without an increase in premium for about 2 years.

Family Floater Plans with all their advantages come with certain clinchers. For instance, a Family Floater Plan's utility degrades if one of the family member has an adverse health history. In such cases, the likelihood of claim is high so there is the possibility of a higher premium amount. Also if one family member makes a claim; it may exhaust the sum assured leaving all other members without, or with limited cover till the renewal of policy. Finally, these plans are priced according to the age of the senior most family members. As the oldest member ages, the flexibility of the plan decreases and its cost increases.

If you've bought insurance before, you will be familiar with the concepts of loading. Loading is applicable in the case of Family Floater Plans as well. Companies will increase, aka add a load to your premium, if you had made a claim in the previous policy year. However, some companies like Apollo Munich, Religare Health Insurance and Tata AIG General Insurance do not charge any loading to your premium in case of a previous claim. It is advisable that while buying a plan you ask the provider for clear terms for the claim loading.

Customer friendliness is also an important factor to consider. Some good plans to look into are from companies like Apollo Munich Health Insurance for restoration bonus and cumulative bonus, Religare
Health Insurance for their extensive network, Bharti Axa General Insurance for their good plans at economical rates and Max Bupa Health Insurance for being extensively features driven. Make sure to do a cost-benefit analysis to arrive at the right combination for your family.

The author, Yashish Dahiya is CEO & co-founder, PolicyBazaar.com