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Decoding the Family Floater versus Individual Health Plan Dilemma

Adil, a young IT professional in his early 30’s was looking to buy a health insurance policy. A little research made Adil aware of the possibility of opting for a family floater plan where a single policy can cover him along with his wife and their small child. The premium for the family plan was effectively a little lower than an individual plan. This made perfect sense for Adil financially, but he was left wondering if the family plans offer a substantial cover considering the high medical costs.

Adil is not the only one, who have this doubt. aOften many health policy buyers find themselves faced with the same dilemma. If you are also on the same boat as Adil, and wonder if a family floater plan is better than an individual plan or vice versa, read on.

Individual health plans and family floater plans: Similarities and differences
An individual health plan, is a health insurance policy catered for the individual. So if Adil takes an individual health insurance policy he will need to buy one for himself, one for his wife and a third one for his child. He would be paying an annual premium for all three policies as per the maximum cover. The hospitalization expenses will be reimbursed for each policy as per the policy terms and conditions.

A family floater plan on the other hand allows Adil to buy a single policy that covers himself, his wife and child in a single policy with a single collective premium. The difference being that the coverage is shared between all family members. So if Adil buys a family floater plan of Rs. 10 Lakhs and uses Rs. 3 Lakhs for some treatment, he and his family would only be left with a remaining cover of Rs. 7 Lakhs for the rest of the year.

Individual health versus family floater plans: Advantages and disadvantages
The one big advantage of opting for a family floater plan is that it is a collective plan that caters to the medical needs of the entire family. No more tracking multiple premiums and multiple policies for each family member. The premium for family floater plans is also usually lower than collective individual plans.

The downside is the collective sum assured and shared protection. Another important factor often overlooked is that a family floater plan ceases to exist when any one member attain the maximum age of renewability of either 60 or 65 years depending on the insurer. Another disadvantage is that should you plan to rope in your parents and in-laws in a family floater plan, you may not always be able to do so as most family floater plans cater to the needs of the individual, spouse and kids.

Individual health or family floater: Which one to go for?
Both individual plans and family floater plans are tailor made to offer effective protection. If you are young with a younger family and not looking for a cover for your extended family, a family floater plan is not only pocket friendly but also quite effective in terms of overall protection. If you are employed and have a group health cover from your employer, a family floater plan can enhance your overall protection, making it an ideal option for you and your family.

If however you are older with a medium to high risk category or have any pre existing diseases, having an individual or a specialized plan is the best way to ensure optimum protection for you and all other members of your family.

Conclusion: No matter which plan you choose, simply relying on just comparing the premium cost is best avoided. Both family floater and individual health plans have their individual merits that are far essential than just the premium costs.

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