It's a well-known fact that healthcare costs are on the rise and one has to provide for it. Mediclaim covers offered by general insurers are popular among customers to meet their healthcare expenses. But is it a perfect hedge? Is the size of the policy good enough to manage your entire family's healthcare expenses? It's more prudent to go for a family floater instead of opting for multiple policies for your family, especially in the case of younger families.
What is a family floater?
Family floater covers the family as a whole for a fixed sum assured. So if you take a policy of Rs 4 lakh, each member of your family (who is covered under the policy) can utilise the entire amount. It doesn't mean the amount is split among the family members. Such policies are generally targeted at a family of two adults and two children. Although couples with no children or a single child can opt for a floater.
Can I cover my old parents under this scheme?
Most policies have 60 years as the upper limit. Hence it's advisable to cover your spouse and children under this option.
What's the advantage?
Saving on multiple premium cost is the biggest advantage. For example, if we take a family, with husband (38 years), wife (34 years) and two children (aged 8 & 6), the premium for a four-lakh policy works out to Rs 12,000. If this amount is split among four people, by opting for individual policies, the premium works out to around Rs 12,650. But the sum assured for each individual is much lower in that case.
What are the facts you should keep in mind?
A single claim by any one of the family members can exhaust the cover limit. As a result, other family members will have less or no coverage for the rest of the year. Secondly, the policy cannot be renewed if the senior most member crosses the maximum eligible age as mentioned in the policy. At this point of time, the rest of the family will have to go for a fresh policy. As a result, the premiums would be much higher for family members who have crossed 40 years of age. This logic also applies to children who cross the maximum age, which is 25 years in most policies. At this stage, a child has to opt for a separate policy. Like a regular policy, the renewal premium shall be calculated as per the age of the senior most insured member as covered under the policy. A loading may be charged on the premium in case there is a claim in the expiring policy. For instance, ICICI Lombard charges a loading of 10% for claims in the range of Rs 25,000 to Rs 50,000 and it increases to 20% for claims in the range of Rs 50,000 to Rs 1,00,000, 50% for claims in the range of Rs 1,00,001 to Rs 2,00,000 and 75% for claims above Rs 2 lakh.
Hence family floater is an economical option that is more beneficial for a family with younger members, with the oldest member being 45 years of age, helping them in the long run.
