A family floater is cheaper than individual policies for each family member. But, it may not be the best option at all times
THE PROS AND CONS
To begin with, one should understand the difference between an individual cover and a family floater plan. An individual plan covers only the policyholder, where as a family floater covers the entire family, usually comprising self, spouse and two dependent children. There is usually a family discount of up to 10% on the total premium when the husband, wife, dependent children and/or dependent parents are covered under the same policy. Since the insurance company is aggregating risks, the premium is lower.
The other advantage of a floater plan is the flexibility that comes with it. Any family member can lodge multiple claims, totalling . 3 lakh, the sum assured, in a year. So, any member of family can claim up to . 3 lakh. But in an individual cover, only the individual who has taken the policy can make a claim and that too for the amount he/ she is covered for.
A family floater policy is also easier to manage than an individual plan. While renewing, you just need to remember a single date, instead of three or four dates in the case of individual plans.
Also, in a floater, it is easy to add a new family member. But, with individual cover, a fresh policy needs to be taken every time there is an addition to the family. In case of the unfortunate demise of the senior-most member of the family, other members of the family can continue with the floater without losing any benefits. "The surviving members can continue to hold the cover as per the policy terms in the case of the death of the eldest member. The policy can be renew gain with the next eldest member becoming the primary member and the policy continuity benefits can be availed of as per the terms and condition of the plan,.
However, a floater policy carries a rare risk. If a family has a floater plan for a sum assured of say 2 lakh, and if the entire family suffers medical emergencies in an accident, for instance, then in such a case the cover would be inadequate for the family, as each of them may require. 2lakhfortreatment.The individual will then have to shell out money from his/her pocket for treatment. In such a scenario, an individual cover will score better. If there is a medical cost of 2 lakh on each individual due to an accident, each of them can claim 2 lakh, provided they are insured for that amount, and they will not have to shell out from their pockets.
TAKING A CALL
Most of us are diligent while buying health insurance covers. On the face of it, a floater policy does come with the cost benefit when compared with individual policies, but then that should not be the only deciding factor while choosing a plan. You need to consider several other factors, too, to figure out which will suit you better. Age would be one of the important parameters to look at. In a floater policy, the cost is governed by the age of the senior-most member of the family to be covered, says Jacob. So it makes sense for a young family to opt for a floater plan. Also if your parents are above 60, then it is likely that they could have higher claims. Hence, they would be better off with individual plans.
If you are covered by your employer, experts recommend that you buy your own family floater also, to add to the one offered by your employer, as it helps take care of interim periods between job switches. Although you are covered by a floater offered by your company, an additional floater cover is advisable as it would offer coverage to your whole family even if you leave the job or retire. Also floaters help you get additional cover. So, suppose the organisation you work for covers you for . 2 lakh. But if you feel you need a cover of at least . 4 lakh, you can opt for a floater of another . 2 lakh.
If the earning member is covered by the employer and does not want to pay double premium, he could opt for a floater.
Some financial planners recommend having an individual cover first and adding a floater to that. As people get afflicted with medical issues separately and at various ages, it is always better to have a primary cover first. If you wish to have higher medical insurance as your age increases, you can take a floater plan, he says.
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