The adage goes ‘Health’ is ‘Wealth’, nothing else can describe it better. Among many other financial planning decisions you embark on, one of the most important decisions is hedging your health risk. If you have a family with dependent members, then it becomes pertinent that you ensure that all the members in your family are adequately covered.
Why is family health insurance important?
There have been instances in the recent past, during the pandemic, where a single illness in the family has created financial setbacks. The past two years have been an eye-opener wherein it became apparent that the group insurance cover offered by the company may not suffice. Many individuals had to dip into their savings/investments to foot the hospital bills. This can be a major setback for them from the perspective of achieving their financial goals. There is enough data indicating that critical illnesses such as cancer can push families into abject poverty.
These are reasons enough to emphasise the importance of health insurance, however, you must evaluate certain terms and conditions before you avail of the best family health insurance plan.
Read more about Family Health Insurance Plans
Opt for Group Insurance Cover
If you can add your family members to the group insurance cover offered by your company, then it makes sense to avail of this option first. This is for the simple reason that the premiums of group insurance cover are relatively competent as compared to individual health insurance plans. Despite having a group insurance plan, you will have to evaluate your requirement and ensure that the group insurance health plan offers adequate coverage. In most cases, the group insurance cover falls short, as the coverage is too basic, with restrictions and sub-limits. From a family coverage perspective, you may have specific requirements which may not be covered under such broad-based standardised plans.
Hence, the evaluation of the gap is vital, you should avail of an additional insurance plan separately to ensure that you have covered all your requirements. In fact, to avail health coverage for the family, it is ideal that one evaluates family floater plans.
Family Floater Plans
These plans cover your immediate family members (children and spouse) with a single annual payment. These plans allow for multiple hospitalisation claims during the same year, provided the claim is well within the sum insured limit.
The premiums paid towards health insurance policy qualify for deduction under section 80D of the Income Tax Act up to Rs. 25,000 every year. The family floater plans offer coverage for all the members of the family at very competent premium rates.
Using a family floater option can help you create a customised plan which takes care of the specific needs of each family member.
Here are the top 5 considerations to evaluate family floater plans:
Premiums and tenure
This is by far the most basic aspect for consideration for any health insurance plan. For a family floater plan too, this remains the most basic consideration, the family floater premium rates are relatively lower than individual plans for each member of the family. This is because every family floater plan has a small pool of people with varying degrees of risk factors and from an insurance company’s perspective, a diversified risk pool reduces the risk of frequent and huge claims. It is advised that you conduct a comparison across products to choose the plan that offers the longest tenure and competent premium rates.
The extent of coverage
Another important aspect is to evaluate the extent of coverage offered for the sum insured. This essentially means that the inclusions and more importantly, the exclusions of the plan should be studied in detail.
Compare it across other plans which offer a similar sum insured coverage. The idea is to choose the plan which offers a wide range of inclusions and minimal exclusions. It is also pertinent to ensure that there are no loose ends when the exclusions are being listed. Also, check for the additional coverage that you can opt for such as maternity benefits, pre-existing disease coverage, etc.
If things seem hazy, always reach out to the insurance company for clarity and seek documents which support their claim of coverage or exclusion. This can be handy for future reference.
Most health insurance plans these days offer cashless coverage, this is applicable only if the treatment is sought in one of the network hospitals. If not, the insured has to undergo the rigmarole of reimbursements.
It is practical to ascertain beforehand and ensure that the network hospital list covers those hospitals that are most accessible to you and provide world-class treatment/service.
Limits, co-payment, deductible and waiting period
Many health insurance companies protect themselves by including limits and sub-limits. You must choose a plan with minimal limits and sub-limits, you may be required to pay a higher premium to ensure that the limits and sub-limits are minimal.
This will provide you with a stress-free situation in case of hospitalisation and ensure that you get the best treatment irrespective of the cost.
Check for co-payment clauses which could be applicable for senior citizens included in your family floater plan and opt for the one with the least amount of co-payment. Similarly, deductibles could lower the premium, but they might increase your overall outflow in case of a claim.
Also, check for waiting periods in your health insurance plan, especially if any of the members have any pre-existing ailment at the time of opting for the health insurance plan. This is because you would not be able to raise a claim during that period for the specific ailment.
Add-ons and customisation
Often, you or your family members may have specific medical conditions, and this may require a plan which is tailored to include the requirements. This could be through add-ons or special customisation. Check with your insurer if there is a clause which will specifically cover the situation/condition at hand.
By going over each of the above pointers, you will be able to choose the right family floater health insurance plan. This will ensure that you experience the least financial stress during health emergencies.
This article is issued in the general public interest and is for educational purposes only. The blogs should not be used as a substitute for competent expert advice from a licensed professional to best suit your needs.