Family floater v/s individual plans for senior citizens

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The advancement in medical technologies has certainly increased the life expectancy rate in India. However, the cost of these medical procedures is so high that it becomes nearly impossible for a common man to afford it. Considering this, it is important to stay financially protected by investing in an adequate sum insured health policy.

But, while investing in a health plan you need to decide, which policy will fulfill your family’s needs and cover every member adequately. When planning to invest in a health plan for yourself, your spouse and your kids one can go for family floater plans as it gives protection to each member of the family adequately. However, it is advisable that you should buy an individual health plan for your parents as covering them under a comprehensive plan will give them extra protection which is much needed in old age. In addition, under family floater plan there are certain restrictions like sub limits & waiting period, which may become a hurdle as you age and may require hospitalisation.

Adding to this, according to the reports, Covid-19 is affecting older adults more, as they are vulnerable to having multiple underlying diseases such as heart diseases, diabetes or respiratory illness. Also, having a weaker immune system in addition to this makes it harder for them to fight off the covid infection.

Therefore, in these trying times, when income is limited, a person can rely on health insurance with an adequate sum insured for his parents. Which will keep them financially protected in case of any emergency.

How do both the plans work?

Under an individual health insurance plan only one person can be covered in each plan. This means, the health insurance premium, sum insured and additional benefits can only be used by the insured person solely, it cannot be shared. For instance if you’ve taken a plan of Rs 1 Cr. you alone will have up to 1Cr. to benefit from, for the entire policy period. Whereas, in a family floater plan you and other family members share one plan. This means, the sum insured, premium and benefits have to be shared amongst all the members involved. In addition to that the coverage amount will keep coming down as and when a member makes any claim.

Premiums

Another factor that needs to be considered while choosing between family floater plans and individual health insurance for your parents has to be the premium. The premiums of a family health insurance depend on number of family members insured and the age of the eldest person insured. Considering this, family floater plans make the most sense for a young and budding family, where you are the primary insured member.

Now, under an individual plan since the policy is available for only one member, the premiums will be determined on the basis of the age of that member and their pre-existing conditions. Therefore it’s better to buy a separate plan for your parents rather than adding them under a family floater plan.

Considering the current situation, when coronavirus is spreading like wildfire, it is quite evident that there might be chances that more than one member of your family is in need of hospitalisation. Also, as your parents are generally at higher risk of contracting other ailments as well, and further considering the cost of such treatment running into lakhs a family floater plan may not be sufficient for each and every member of your family.

While, in an individual health plan even if a member uses up or exceeds his/her own sum insured, the sum insured of the other family members remains unaffected. Also, a separate health plan with an adequate sum insured is advisable considering the current situation.

Renewals

Family floater plans can only be renewed till the oldest member reaches the maximum renewability age i.e. between 65 to 75 years. If he/she exceeds, the member will be dropped out from the plan and will no longer be insured anymore.

However, under an individual plan for senior citizens, the policy can be renewed lifelong without any age limit or any other restrictions. And naturally it takes off the financial pressure in case of any medical emergency

Waiting period

With age, the possibility of being diagnosed with critical illnesses like diabetes, cancer, kidney problems, etc, increases. Now, generally, health policies come with a waiting period of 2-4 years during which they don’t cover pre-existing diseases (PEDs). However, in the recent past, there are many individual plans which have started offering coverage from day one for PEDs.

On the other hand, in a family floater plan, if there are any pre-existing diseases, treatment coverage will only be provided once this waiting period is over. This can range between 2-4 years depending on the insurer.

Hence, opting for an individual health plan for your parents who have any pre-existing diseases is advisable.

(The writer is Head- Health Insurance, Policybazaar.com. Views expressed are personal)