The choice between a family floater plan and individual policy for each family member is not an easy one. There is always a bit of confusion regarding which one will fit your needs best. Here is your job made easy, right from explaining both kinds of plans and putting into perspective the differences and benefits of each.
What’s The Difference?
So, understand it like this. The difference between the two is pretty much like pints and pitcher. In a bar, either you order a pitcher so that everyone in the group gets to drink as much as one wants OR you order pints for everyone. This way they get to drink only their beer.
In the same vein, a family floater plan is an umbrella cover for the family at large. It includes self, spouse and children, but a few insurers can also let you include parents and parents-in-law depending on the policy. Any member listed in the policy is allowed to use the sum assured in any proportion. In short, one plan to cover ‘em all!
Individual policies are meant for one person. They cater to the medical needs of only the individual who is insured. Your spouse and your children can’t benefit from your individual policy. So, the line here is ‘To each his own’.
A family floater plan is invariably cheaper than the cost of equivalent individual policies for each member, given that in terms of benefits they are of equal standing. There is a simple rationale for this. The chance of all the family members being hospitalized at the same time is fairly low. This way the risk is substantially distributed, which allows the insurance companies to offer it at lower premiums.
There is one age related restriction specific to family floater plans about the children. Family floaters cover children only up to a certain age, usually between 20 and 25 years, after which they are excluded from the family cover. Of course, there is no question of such thing happening in individual insurance policies.
Senior Family Members
The other thing one must note is related to the senior most member of the family. It is not advisable to include senior parents on the family floater plan. One, because it will increase the premium by a good margin, and two, it will not prove adequate for the family on the whole. Senior members have pressing medical needs and are hospitalized more often. This will not leave enough sum to be utilized for others in the family.
No Claim Bonus
Family floater plan is one policy for the entire family. So, if a claim is made for any member, it impacts the no claim bonus. From this point of view, individual policies have an edge over family floater. They are independent of each other and claim on one policy doesn’t affect the NCB of other members’ policies.
Read more about No claim Bonus
-Family floater is considerably cheaper than individual policies
-The fact that the sum insured can be shared among the family members in any proportion gives family floater an advantage over individual sum assured.
-The age related restrictions in family floater plans call for a better assessment of your needs. If you’re a nuclear family with senior member in his/her 30s, a family floater plan makes a lot of sense. If you want to include middle-aged/old parents in the family floater, it may not be such a good idea.
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