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Individual vs. Family Floater: Which Insurance Policy to Choose?

By Finserv MARKETS - Jan 29,2019
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individual vs floater

When you are looking to buy a health insurance policy, do you choose to buy one for yourself or one for your entire family?

Making the right choice is critical as the right policy will keep your finances intact during a medical emergency and the wrong one have an adverse impact on the same. In this article, we have detailed out some of the key differences that can help you make the right choice.

The difference explained

An individual health insurance, as the name suggests, covers the policyholder up to the sum insured. For example, if you own a policy worth Rs. 5 lakhs and a medical emergency were to strike you, the policy would become active and cover your entire treatment up to Rs. 5 lakhs. Say, your medical treatment costs came up to Rs 3 lakh, the policy would settle the bill and for the remainder of the financial year, you would have an insurance cover worth Rs 2 lakh.

On the other hand, a family floater policy has a slightly different setup. You can buy this online health insurance policy and pay a single premium, but it can cover more than one individual i.e. you are able to buy a cover for yourself as well as for your spouse and two children.

To illustrate with an example, let’s say that you bought a family floater plan worth
Rs. 7 lakh and your elder child has to undergo a surgery worth Rs. 3 lakh, the family floater policy will be activated and will cover the expenses for the same. However, once the bills are settled, for the remainder of the financial year, every member of your family covered under the policy will have a coverage Rs. 4 lakh.

On the other hand, if you bought an individual health insurance plan of Rs. 3 lakh for each member of your family and your elder child undergoes an operation that costs Rs. 3 lakh, then only this child’s plan will be activated. The coverage for every other family member for the rest of the year will still be Rs. 3 lakh.

Which policy is the right one for you?

Choosing the right health insurance plan will depend upon your needs and requirements, however,

  • Considering the sum insured, a family floater health plan is a better option because you can choose a higher sum for a lower premium amount as compared to an individual policy where you will have to shell out a higher premium for the same sum insured.
  • Young families can benefit the most with a family floater health insurance policy. This is primarily because due to their age, the risk of disease and hospitalization is lower and hence they get to enjoy a high sum insured for an affordable health insurance premium.

On the other hand, when a single individual under a family floater plan falls sick and uses the policy to cover the treatment costs, the total sum insured decreases for everyone covered under it.

The above points should help you take a decision on the right health policy for you however, regardless of the policy you choose, you can opt for additional health insurance add-on covers. They come at an additional fee/charge but help in times when medical costs will cross your base policy’s sum insured.

For example, a critical illness add-on cover can pay a lump sum amount in case you are diagnosed with one.

To summarize, both policies have their pros and cons and the choice comes down to your needs and requirements.

Now that you know everything about individual and family floater health insurance plans, it is recommended that you buy your health insurance online for an easy, convenient, quick and hassle-free process.

Also know about health insurance benefits your will get after you buy the policy

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Bajaj Finserv Direct Limited ("BFDL"), erstwhile Bajaj Financial Holdings Limited is a registered corporate agent of Bajaj Allianz Life Insurance Company Limited and Bajaj Allianz General Insurance Company Limited under the IRDAI composite registration number CA0551 valid till 10-Apr-2021. BFDL also renders services to Bajaj Finance Limited (‘BFL’) and Bajaj Housing Finance Limited (‘BHFL’) (referred hereinafter as ‘Lending Partner’) in sourcing of customers, providing preliminary credit support activities, fulfilment services and post-acquisition customer services related to lending business. Registered Office: Bajaj Auto Limited Complex, Mumbai – Pune Road, Akurdi, Pune – 411 035 CIN: U65923PN2014PLC150522