How To Ensure Health Insurance Coverage For Extended Family Members?

The world is getting smaller these days. And so are our families. The new generation does not know how it feels to get spoiled by loving grandparents. Or to confide all the silly lil’ secrets in cousins who keep them safe with their whole heart? Oh, the joy!

A joint family is a beautiful institution — everyone eats together, laughs together, and supports each other through the ebb and flow of life. They are your first caregivers, your mentors, your best friends, and your partners-in-crime.

It’s sad that increasing urbanization, scarcity of space in big cities, and the impact of westernization - are making us opt for a nuclear family. However, if you are one of those blessed ones who get to live with their extended family, or have forged and maintained a close relationship with them, we’re so happy for you! And we would love for you to be able to take care of them.

There’s no alternative to good health or a good health insurance policy. So how do you cover your extended family members? Let’s find out, in this article!

To begin with… 

What is an extended family?

As the name suggests, it’s a family that extends beyond the nuclear family of parents and their children. It includes aunts, uncles, grandparents, cousins or other relatives. 

How to ensure Health Insurance plans for your extended family?

You get 2 options -

1. Buy Individual Health Insurance Plans

As the name implies, it is a type of health insurance plan that covers only one individual. This means, the sum insured can be availed of by one person only and cannot be shared by others.

1. How does Individual Health Insurance work?

   You choose the sum insured required by the individual covered, and based on the amount and the plan’s T&Cs, the insurer will cover incurred healthcare expenses. In exchange, you need to pay regular premiums. This plan offers coverage to one person. So to cover all your extended family members, you need to buy separate plans for them.

   For example, if you have bought a plan of Rs. 10 Lakhs for your grandfather, he alone will have a cover up to Rs. 10 Lakhs, for the entire policy period. Now, suppose he undergoes a joint replacement surgery and incurs expenses worth Rs. 3 lakhs. Then the insurance company will settle the bill with the hospital, as per the policy terms. And his sum insured will be reduced to Rs. 7 lakhs for the rest of the policy year. Now if your grandmother is hospitalized, the plan won’t cover her expenses.

2. Pros of buying Individual Health Insurance for extended family members?

   • Every member gets a separate cover. So in case anybody in your family suffers from a chronic condition and needs several hospitalizations, the policy will ensure that a claim by one family member doesn't affect the coverage of other members.

   • A great option if the age gap across your family members is high; i.e. you want to cover young and old members. An aged person may incur more medical expenses than a person who’s young and healthy. But that will not affect the young individual’s coverage.

3. Cons of buying Individual Health Insurance for extended family members?

   • If you take an individual policy for every member, you’ll have to maintain separate policies and pay multiple premiums. That may get pretty inconvenient and expensive.

   • There are chances of the cover being wasted, as the whole sum insured is restricted to a single individual.

Now, the 2nd option you have is to-

2. Buy a Family Floater Health Plan

Here, all your family members can share a single coverage under a single policy. This means the sum insured can be shared amongst all members of the plan. You will have to buy and manage only one policy and pay only one premium.

1. How does Family Floater Health Insurance work?

   Under this plan, all the family members will have the entire sum insured available for them. If one member undergoes treatment/hospitalisation that costs quite a bit, the entire cover amount will be available for them. However, if one member exhausts it all, there might not be sufficient cover left for others.

   Also, many insurance companies restrict the number of people you can add. Mostly they allow coverage for 2 adults and 2 children. However, some insurers allow coverage for extended family members as well, and allow you to add up to 4 dependent children (less than 24-25 years of age), and up to 2 parents or parents-in-law. Some also allow a combination of 1 parent & 1 parent-in-law, aunts, uncles, cousins, etc.

   For example, suppose you have bought a family floater of Rs. 8 lakhs, and want to cover your parents, your spouse, your aunt, and yourself. Your aunt needs to undergo a nephrectomy and the whole treatment will cost around Rs. 3 lakhs. The family floater plan will cover the costs, and thereafter, the sum insured gets reduced to Rs. 7 lakhs.

   Now, in the same year, suppose your aunt needs to undergo a heart bypass surgery that costs Rs. 4 lakhs, along with the medications. And your spouse needs regular physiotherapy sessions that cost Rs. 1 lakh.

   Since the sum insured is shared among the family members, the policy will cover up to Rs. 7 lakhs of their expenses. But the remaining Rs. 1 lakh will have to be paid out of your own pocket.

2. Pros of buying Family Floater Health Insurance for extended family members?

   • One large cover can be shared across family members. Therefore, sufficient cover for all.

   • One policy means one single policy document. Hence, ease of management.

3. Cons of buying Family Floater Health Insurance for extended family members?

   • One member can exhaust the entire cover, as we saw in the previous example. If one person in your family gets hospitalized and ends up using most of the sum insured, the remaining members might be left with inadequate cover.

     This problem can be solved by -

     • Buying a Floater Plan only if the family members are healthy and the age gap is less

       Invest in this plan if the age gap among your extended family members is less. And they do not suffer from chronic conditions and need several hospitalizations. It will make sure that a claim made by one member will not affect the coverage of the other.

     • Taking an adequate Family Floater cover for the long term

       Buy a health insurance cover that is adequate not just for today, but for tomorrow. Take into account multiple factors, like the family members’ age, medical conditions, health history, inflation rate, etc.

     • Buying the plan with Restoration Benefit

       During the policy term, when the sum insured limit is exhausted, it can be restored or refilled under Restoration Benefit. If you buy a floater plan with this feature, you can ensure your extended family members have enough cover, always.

       Note: In some policies, this feature is available by default, while in others, it is there as an optional benefit. Also, the conditions for restoring the sum insured may vary across insurers and products. So do go through the policy wordings carefully, before making a choice.

Wrapping up!

Growing up with cousins, uncles, aunts, and grandparents gives us the opportunity to connect with everyone easily and forge close bonds. It teaches us the virtues of sharing, caring, and thinking beyond ourselves. If you are living with your extended family, make sure to count them in your blessings. And protect them with a good Health Insurance plan of your choice!