How to pick a right family floater health insurance policy

With rising medical expenses, having a health insurance plan has become quite necessary. Primarily, a person can buy two types of health insurance plans - individual and family floater health insurance plan. While individual health plan will only cover a single person, a family floater covers the entire family - husband, wife and children. Some family floater policies also offer coverage to parents, parents-in-law and siblings.

Why choose family floater over individual health plan? The idea behind family floater is less likelihood of an entire family falling sick at the same time. Hence, buying one policy that covers all family members for a sum assured makes sense. It reduces the overall premium compared to buying individual policies for everyone.  In case you have exhausted the sum assured, you can anytime top-up or super top-up your health plan.

"In family floater plans, the entire sum insured floats among the covered family members. Any covered family member can utilise any amount up to the sum insured. For instance, if you buy a family floater plan with Rs 20 lakh, then any of the family members can utilise any amount up to the sum insured. A family floater plan offers great flexibility in terms of utilising the overall insurance coverage among the covered family members," explains Amit Chhabra, Head- Health Insurance, Policybazaar.com.

Here are key things to watch to pick a right family floater health plan:

How much coverage do you need?

You should take into account the healthcare cost in the city where you live. Factor in medical inflation also. According to Chhabra of Policybazaar.com, a family living in a metro city should consider a policy with a sum assured of Rs 15-20 lakh. "One may look into Rs 1 crore health plan also that will cover your immediate family members for all the medical contingencies without any add-ons," he suggests.

Needless to say, a higher sum insured will come on the back of higher premium. Make sure you can afford that premium. "There are several plans in the market that offer variable coverage on their health plans. Choose the sum assured carefully. A person should keep the rising medical costs in mind along with the premium amount, which should be affordable," says Naval Goel, CEO & Founder of PolicyX.com.

Notably, both the premium and the sum assured in a family floater plan depend on the age of the oldest member of the family being covered. "It is beneficial if the eldest member of the family falls under the age bracket of 26-40 years. A separate plan should be bought for senior citizens because senior citizen-specific plans are available in the market designed specifically to cater to their old-age needs," Chhabra says.

Exclusions and waiting period

These are the two most important factors about which you should be watchful. Always read the exclusion clauses in the policy document and the waiting period for pre-existing diseases. Commonly alternative therapies such as Ayurveda, Naturopathy, and Unani, lifestyle diseases such as lung disease and cirrhosis and pregnancy and childbirth etc are not covered. Besides, most pre-existing diseases come with a waiting period of two to four years.

"What are the diseases that are not paid during a specific time period? Does the policy cover pre-existing diseases? If so, from when does it start?" says Goel of PolicyX.com.

Often people refrain from disclosing pre-existing diseases as it results in a higher premium. However, you must always disclose it and in fact, should be ready to shell out extra to cover critical illnesses.

Network hospitals

Before you buy a policy, check out the network of hospitals that your insurer has. Choose the insurer whose network of hospitals includes the major ones in your locality. "Insurance companies have empanelled hospitals, with which they have a tie-up. The hospitals in the network have instructions on how to settle claims from a particular insurer and also liable to offers the cashless cover. You should check which hospitals are within the network of the insurance company, including their specialty and reputation," advises Goel.

Top five family floater plans

Below is the price comparison of top insurers offering family floater health plan to a 30-year-old male, his spouse, and two children with eldest child age six years living in a metro city with a sum insured of Rs 15 lakh.

How to get coverage beyond sum insured

If one of the family members has claimed some amount of sum assured, you must buy top-up or a super top-up plan on your health policy for additional coverage.

"Super top-up policy will offer you coverage of mediclaim above your chosen deductible limit along with extraordinary features. It offers you financial relaxation in the event when your hospitalisation claim bill crosses your sum assured under any other mediclaim policy. Thus it acts as cushion and comes into action when you have exhausted the chosen limit," explains Naval.

Top-up health plans have a similar role. What is the difference then, you wonder?

A top-up plan covers a single claim in a year, that too above the threshold limit (the maximum coverage under your traditional policy), while the super top-up plan covers all hospitalisation bills above the threshold limit. For example, You have a family floater policy of Rs 5 lakh. A top-up or super top-up of Rs 5 lakh will make your policy coverage Rs 10 lakh. Consider this - two family members fall sick in a particular year and at both times, the bill amount claimed was Rs 3 lakh. Your regular health coverage was enough during the first time considering you had a health plan of Rs 5 lakh, the threshold limit. But, your top-up plan will not get activated for the second claim because the claimed amount of Rs 3 lakh is less than the threshold limit. Only remaining Rs 2 lakh coverage of your traditional policy could be used in the second case. However, your super top-up health insurance plan will cover you for the total billed amounts in a year - irrespective of multiple billings.

A clearer depiction as follows:

Discounts

Family Health policies come with many discounts. Some of these discounts include no-claim bonus, cumulative discounts on premiums, reward points to those who have a good lifestyle, exclusive discounts for women and vouchers etc. Do enquire about it from the policy agent and make use of it.

"No Claim discount encourages the non-claimant by giving a defined reduction in renewal premium while Cumulative Bonus increases the coverage amount in a defined way. Check the most suitable option to suit your financial capability. Some insurers give value-added services such as free health checkups, OPD packages, and other attractive health offers. Companies Like Bajaj Allianz and Reliance General provide reduced premium rates to their female members as part of woman empowerment," says Goel of PolicyX.com.

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