Family Floater Health Insurance – A Detailed Explanation

Will you buy a Health Insurance?

Ask this question to someone who has a history of hospitalisation in the recent past. He will definitely tell you the need for going for a health insurance.

But with increasing premium rates, we have to see the cost effective options in health insurance. Family Floater Health Insurance will be a better option in many cases.

The inflation rate in healthcare sector is much higher than the general inflation and with improved medical technology, the healthcare costs are increasing day-by-day. You cannot afford to avail treatment without a health cover. Family Floater Health Insurance will help you in this regard.

Family Floater Health Insurance

What is Family Floater Health Insurance?

In Family Floater Health Insurance, you can insure all members in your family in a single policy. Assume that you and your spouse are in the age band of 36-45 years and your son is aged 10. So, instead of taking an individual policy of Rs. 2 lakhs for each member, you can go for a Family Floater Policy of Rs. 5 lakhs. In what way is a Family Floater Health Insurance beneficial to you than going for Individual policies? Let us see the details.

How will you benefit from Family Floater Health Insurance?

Family Floater Health Insurance will help you in buying the insurance for all at a lesser cost. If you are buying a policy for Rs. 2 lakhs for each member and one member in the family had a serious ailment and spends Rs. 3 lakhs in a year, the claim will be limited to Rs. 2 lakhs only. But you can claim the entire amount, if you have a Family Floater Policy in this case. Let us see this in detail.

In what way your benefits differ in a Family Floater Health Insurance?

In the above example, let us assume, you have opted for individual policies of Rs. 2 lakhs each. Unfortunately, you are hospitalised due to heart ailment and the total bill is Rs. 3 lakhs. Since the Insurance cover on your life is for Rs. 2 lakhs, you will get only that much from the Insurance company and you have to pay the balance of Rs. 1 lakh. If in the same year, your wife is also hospitalised and there is a bill of 1.25 lakhs, she will get the full amount paid by the Insurance company. This is because she is also covered for another Rs. 2 lakhs.

If you have opted for the Family Floater Policy of Rs. 5 lakhs, in that case, your bill of Rs. 3 lakhs will be paid in full and your wife’s bill of Rs. 1.25 lakhs also will be paid in full. This is because, in a Family Floater Health Insurance, your total cover of Rs. 5 lakhs will float between all members covered. Anybody in the family covered in the policy can claim the amount. The only condition is that, the total payout in a year will be limited to the sum insured. In our example, it is Rs. 5 lakhs.

Which is better? Individual Policies or Family Floater Health Insurance?

If you are young, the chances of all members in the family getting hospitalised in a year will be remote and Family Floater Health Insurance will be cost effective. Any member hospitalised can benefit from the full sum assured of the Family Floater Policy.

As age advances, the chances of hospitalisation increases and it will be better to opt for individual policies of higher sum assured.

What will happen to the Family Floater Health Insurance, if a member dies?

You can inform the insurance company and the policy will continue without that member. Premium for the next year will be reduced accordingly.

Family Floater Health Insurance will be better for young families and a decision to go for it or not is to be taken after doing a cost benefit analysis. But if any member is suffering from serious health issues, then the Family Floater Health Insurance may not be the ideal option.


5 thoughts on “Family Floater Health Insurance – A Detailed Explanation”

  1. What happens to the Family Floater policy which includes 3 generations of family members ……in which the Proposer is no more ?

  2. Sir,
    I have oriental insurance policy (family flaoter) with me, wife, daughter, and my mother. I have been with oriental insurance for 3 years now. My questions are
    1. I want to include my father (70 years) to the plan. Is it possible?
    2. Can I switch over to any other company (say new India or star health) and the benefits of staying with oriental insurance policy will be carried over or will they be lost?
    3. How to switch over?

    1. It is better to go for separate policy for your father. The premium for a family floater is decided based on the age of the senior most member in the family. Yes, you can switch over to any other company at the time of next renewal. You have to apply to the new company around 45 days in advance. It is called portability. Yes, the the benefits will be carried forward to the new policy.

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