Family Floater Health Insurance

When you subscribe to an OTT platform, whether it’s Netflix, Amazon Prime Video, Zee5, etc. - you have the option of choosing a plan that gives each member their separate profile so they can customise their watchlist and likes accordingly. And, this can be done by paying the subscription fee for a single account instead of creating separate accounts and paying multiple fees for each person.

Similarly, when it comes to health insurance, you can purchase a family plan. This is easier to manage and cost-effective too! These plans are known as ‘Family Floaters’ and they cover the requirements of your family without the extra effort and hassle of buying and managing individual plans.

How do family floater plans work? What are their benefits? Are there any drawbacks? Let’s discuss in detail.
 

Family Floater Health Insurance Plans

A family floater, as discussed before, is a type of plan. It covers your entire family. So, if one member of your family needs coverage for an expensive medical treatment, the entire sum insured can be used for the same. It is not very likely that multiple family members would need such expensive treatments, and hence, this cover comes in handy for anyone who requires it while being a protective bubble for all members.

An important point to keep in mind is that the claim amount should not exceed the sum insured, whether it’s used by one member or multiple members.

For example, Meenal buys a family floater plan with a sum insured of Rs 30 Lakhs for her 6-member family. Her father needs to undergo a major pancreatic surgery and this procedure will cost around Rs 10 Lakhs. This will be covered by the plan. Her mother needs physiotherapy sessions that cost Rs 5 Lakhs and her husband needs hernia treatment that costs Rs 4 Lakhs. This will be covered by the policy too.

How Does Family Floater Health Insurance Work?

Example: Nagma bought a family floater health insurance for her four-member family (herself, her spouse, and her 2 sons) with a sum insured of Rs 20 lakhs. She needs to undergo kidney surgery, which will cost around Rs 8 lakhs. Her husband needs knee replacement surgery, which will cost him approximately Rs 7 lakhs. The total cost comes up to Rs 15 lakhs, which falls within the sum insured and hence, both treatments will be covered by the policy.

How Is Family Floater Health Insurance Different from Individual Health Insurance?

Here’s how a family floater differs from individual health insurance -

 

What Is Covered Under Family Floater Health Insurance?

Family floater health insurance policies cover the following -

• Inpatient hospitalisation

  Family floater health insurance plans will cover expenses you undergo while you or anyone in your family is hospitalised - as per the policy terms and conditions. Expenses like the room rent, doctor fee, cost of the treatment, among others are covered.

• Pre and post hospitalisation

  Expenses undergone before you're hospitalised and after you're discharged from the hospital will be covered by family floater health insurance plan.

• Daycare Procedures

  Some surgeries or treatments such as bone surgery, eye surgery, tonsillitis, etc. may be completed within a few hours at a hospital or day care centre. They do not necessitate hospitalisation for more than 24 hours. These are called daycare procedures.

• Ambulance Charges

  The insurance company will cover the costs of an emergency road ambulance that transports you from the scene of the emergency to a nearby hospital or from one hospital to another. The frequency of coverage may vary across insurers.

Note: The scope of coverage may vary across insurers. Read the policy wordings to see what is covered under your family floater health insurance.

Permanent Exclusions Of Family Floater Health Insurance

A permanent exclusion is a situation or condition that does not fall within the scope of the insurance policy and will not be covered. Thus, the insurer will not pay for such a condition or treatment if you file a claim for it.

Types Of Permanent Exclusions

• Standard Permanent Exclusions

  These are standard exclusions in every insurance policy that will never be covered at any cost. They include -

• Diagnosis & Observation

  In case you are admitted to the hospital only for diagnosis/evaluation.

• Obesity/ Weight Control

  Any treatment particularly administered to treat obesity or control weight.

• Drugs & Narcotics

  Any illness or injury caused by drug abuse, alcoholism, etc.

• Cosmetic/ Plastic Surgery

  Medical procedures to change your appearance or body features like rhinoplasty, hair transplants, etc.

• Change Of Gender Treatment

  Treatment for changing the characteristics of the body to those of the opposite sex.

• Profession in Risky or Adventure Sports

  Any injuries because of risky or adventurous sports, such as bungee jumping, parasailing, kayaking, etc.

• Unproven Treatments

  Treatments or surgeries for illnesses or injuries that are yet to be proven.

• Other Costs

  Administrative fees, registration fees, consumables such as gloves, masks, syringes, needles, etc.

Note: There may be other exclusions. Please read the terms and conditions of the policy or discuss with your financial advisor to understand the exclusions of your policy.

• Additional Permanent Exclusions

  There may also be additional exclusions for medical conditions or specific situations other than the standard permanent exclusions specified in the above section. If you suffer from certain diseases or serious medical conditions that the insurers consider too risky to cover, they may exclude them permanently from the policy.

  However, insurers are permitted to permanently exclude only those illnesses listed under IRDAI regulation. A permanent exclusion cannot be applied to diseases that are not mentioned in the list.

  For instance, Rachel has a family history of Alzherimer’s Disease and wants to apply for family floater health insurance. Considering her medical history, the insurer finds it risky to provide coverage for the disease because it runs through the family. Rachel is told that the insurer will only provide coverage if she is ready to accept the condition that Alzherimer’s will be permanently excluded from coverage.

 

Temporary Exclusions Of Family Floater Health Insurance

Temporary exclusions are also known as waiting periods. A waiting period is a duration during which the insurer will not provide coverage for certain diseases/treatments.

Types of Waiting Period

• Initial Waiting Period

  Only accidents are covered from day one of purchasing family floater health insurance. All other treatments performed during this period are subject to a 30-day waiting period.

• Pre-existing Diseases Waiting Period

  A pre-existing disease refers to any condition, ailment, injury, or disease diagnosed or treated by a doctor within 48 months prior to the date of policy issuance. They are subject to a waiting period of 2 to 4 years.

• Specified Disease/ Procedure Waiting Period

  The insurer also applies a 2-4 year waiting period for specific medical conditions and treatments, such as hernias, chronic kidney disease, etc. The list of illnesses will be mentioned in the product brochure or policy wording.
   

Who Can Be Covered Under A Family Floater Plan?

You can insure the following family members under a single family floater plan -

Similarly, when it comes to you can purchase a family plan. This is easier to manage and cost-effective too! These plans are known as ‘Family Floaters’ and they cover the requirements of your family without the extra effort and hassle of buying and managing individual plans.

• Yourself
• Your spouse
• Upto 4 dependent children (less than 25 years of age),
• Upto 2 parents or parents-in-law

Please note that some insurers allow the combination of 1 parent + 1 parent-in-law. Some insurers may also let you add aunts, uncles, siblings, etc. to the plan.
 

Should You Invest In A Family Floater Plan?

A family floater plan may be the right choice for you family, if -

No family member suffers from any major or chronic medical conditions

A majority of the family members are young, and therefore, less likely to need hospitalisation in the same year.

Only one person, i..e, the policyholder needs the tax benefits. Tax benefits for plans are laid down by Section 80D of the Income Tax Act.
 

Family Floaters May Not Be Beneficial For All Families

Avoid buying a family floater plan if -

The members of your family have wide age gaps. For example, if you include yourself, your spouse, kids, and parents-in-law. The family floater premium may be quite high.

There are elders in the family. They are more likely to require hospitalisation and hence, use up the cover amount. This will leave the younger individuals with a very low or no cover.

Any family members have chronic medical conditions. They have higher chances of getting hospitalised, which essentially means larger expenses.

More than one family member needs tax benefits available with under Section 80D of the Income Tax Act.

 

What Should Be The Sum Insured To Sufficiently Cover Your Family?

To make sure each person is adequately covered, you need to buy the total of the individual sum insured you were planning to buy for each member of your family.

For example, if you were planning to buy covers for yourself, your spouse, and child worth Rs 15 Lakhs each - buy a family floater with a sum insured of Rs 45 Lakhs. Do not lessen the amount to Rs 40 Lakhs or 35 Lakhs, just because it’s an umbrella cover. This will ensure that each member is sufficiently covered, even in the off chance that all three of you require hospitalisation in the same year.

 

Benefits Of Family Floater Plans

Family Floaters have the following benefits -

• Efficient From A Cost Perspective

  Family floater plans can be a cheaper option for a larger cover. All the members of your family are covered, without anyone having to invest in multiple plans. This can considerably lower the overall premium as well.

  For example, if all the members you intend to cover under the floater are young, the chances of hospitalisation in the same year are low. So, you can opt for a large cover, say Rs 25 Lakhs, for the entire family instead of investing in individual plans worth Rs 25 Lakhs each.

• Managing A Floater Is Easier

  Buying a floater plan for the entire plan means that you will be required to manage only a single plan. You might have to go through medical tests and declarations for each member during policy purchase, but once it is approved and processed, you won’t have to deal with multiple documents, paying multiple premiums on time, etc.
   

Drawbacks Of Family Floater Plans

While family floaters are cost-effective and easier to manage, they also have a few limitations -

• If One Family Member Uses Up The Cover Amount, The Remaining Member Might Not Be Left With A Sufficient Cover

  If a family member gets hospitalised, they might use up a large portion of the cover. In the event this happens, the other members will not have an adequate amount to cover their own hospitalisation expenses - if and when that happens. To make sure this doesn’t happen, choose a cover that can comfortably accommodate each member, and also opt for a restoration benefit.

  Restoration benefit - Some plans give you the option of adding a restoration benefit. So, if one family member uses up the sum insured in a year, it is restored (or refilled) - so other members are not left without a cover. The terms vary across insurers. Make sure you read the details carefully.

• A Single Incorrect Declaration May Impact The Entire Family’s Coverage

  If any family member provides an incorrect medical history to the insurance company and this is found out during a claim, the insurance company will want to recheck and renegotiate the entire insurance policy. They may charge higher premiums or the policy may even be cancelled - putting the entire family’s safety at risk.
   

Factors To Consider While Buying Family Floater Health Insurance Online

1. Number Of Family Members

   Insurance companies typically allow the following family members to be covered under a family floater -

   1. Yourself

   2. Your spouse

   3. Any dependent children (the limit is 4 children, below 24-25 years of age)

   4. Parents

   5. Parents-in-law

   This list can vary, depending on the insurance company’s terms. Some plans may allow you to include more relations like aunts and uncles, some may allow you add more children, etc.

• Sum Insured

  The total sum insured of the policy will be shared among family members. Thus, the amount you choose must be adequate to cover all the members' medical needs - so no one is left without enough coverage. Keep in mind that if one member needs expensive treatment, everyone else will have access to little or no coverage.

• Cost

  You need to pay premiums to the insurance company in exchange for the coverage you get. Paying the premium diligently is essential to keep your coverage active. So, make sure the premium amount you choose falls within your budget and you never miss a payment.

  Before buying a policy, compare similar insurance plans offered by different companies online. Doing so lets you easily find a policy that fits your budget and offers sufficient coverage.

• Coverage

  The scope of coverage is an important factor to keep in mind. Make sure that the policy you buy covers the maximum number of health conditions and treatments and has low or zero limitations - so you can rest assured that you and your family are well-protected no matter what.

• Add-ons

  Add-ons are additional benefits that you can add to your base policy at a certain extra cost to enhance its coverage. For example, if you see a trend of a critical illness like cancer in your family, you can purchase a critical illness cover along with your family floater.

How Do You Raise A Claim?

A health insurance claim can be made in the following ways –

Cashless Claim

Here, the insurer settles the medical bills directly with the hospital, you don’t have to stress about arranging money or tedious paperwork. You can make a cashless claim only if you get treated at a network hospital, i.e., a hospital listed with your insurer.

Follow these steps to make a cashless claim -

• Check whether the hospital offers a cashless claim facility. If it does, get a list of documents you need to submit to them, such as a copy of the insurance policy, proof of identity, etc.
•  The next step is pre-authorisation, in which the hospital insurance desk contacts the insurance company for initial approval of medical expenses. Keep in mind that there may be delays in the approval process, so you should have some handy money in case you really need to commence the treatment.
• As soon as you know the discharge date, get all bills ready for final approval by contacting the hospital insurance desk. This way you can ensure claims are processed more quickly without any delay.
• The insurance company will verify all documents and bills and give their final approval within 2 to 6 hours. The final approval may take longer than expected for various reasons. Therefore, you can decide whether to wait until the claim is approved or to pay the bill upfront and get reimbursed by your insurer later.
• Insurers will provide you with a claim settlement summary that specifies -

1. Whether a claim has been approved or denied.
2. All the expenses incurred during your treatment.
3. Approved and unapproved expenses.

You should then carefully go through this summary. Contact your insurance company if you have any questions or can see errors.

Reimbursement Claim

In a reimbursement claim, you will have to pay the hospital bill from your pocket upfront and then claim reimbursement from your insurance company later. You can avail of a reimbursement claim if -

1. You undergo treatment or hospitalisation at a non-network hospital, or
2. Your cashless claim request is denied.

Reimbursement Claim Process

Here’s how a reimbursement claim process will work:

• The first step is to notify your insurance company that you are admitted to the hospital.
  1. If you have chosen a non-network hospital for a planned treatment, you will need to notify the insurer (by their toll-free, email, or SMS) as quickly as you can.
  2. If you have chosen a non-network hospital for an unplanned treatment, you need to inform them within 24 hours of getting hospitalised.
• Make sure to organise your hospital bills and receipts carefully. You will need to submit them to your insurance company along with the required documents and a duly filled-out claim form.
• The insurance company may require you to submit additional documents or missed documents, so make sure you give them to them as soon as possible.
• It is also necessary to respond promptly to any queries put forth by the insurer during the approval process.
• After your claim has been approved by the insurer, you will receive a claim settlement summary listing the reimbursement amount, deductions made, and expenses approved and rejected. If you find any errors, you can clarify the same with the insurer.
• You will then receive the reimbursement amount in the bank account you specified on the claim form.

 

How To Buy Family Floater Health Insurance From SMC?

• Visit smcinsurance.com
• Select ‘Health Insurance’ on the screen.
• Choose the number of family members you want to insure under the plan.
• Enter your pin code and mobile number.
• The next page will display a list of plans.
• You can customise the plans according to your needs - select the sum insured, change the policy term, choose add-ons, etc.
• Next, you can compare the plans, check the premiums, etc.
• After finalising the plan, select the 'Buy Now’ button and complete the application process.

 

Frequently Asked Questions

1. Is There A Tax Benefit To Buying Family Floater Health Insurance?

Yes, you are eligible for tax benefits if you buy a family floater - under Section 80D of the Income Tax Act of 1961.

2. How To Choose The Best Health Insurance For A Family In India?

When selecting a health insurance policy, you should evaluate your and your family’s needs and then compare top plans available online. This will allow you to find a policy that is affordable and offers a wide range of benefits.

3. How Long Can Kids Stay Covered Under A Family Floater Policy?

Kids can stay covered under the family floater till they turn 25 years old, after which you will need to buy separate individual policies for them. And, make sure you do not reduce the sum insured in the family floater, as years go by, the need for a higher insurance cover is never going to reduce. In fact, you can also upgrade the sum insured if you feel the current cover amount is insufficient.

4. What Happens When The Primary Policyholder Of The Family Floater Policy Passes Away?

In case the primary policyholder passes away, another adult member of the policy can become the proposer of the policy. To do so, you need to inform the insurance company at the time of renewal.

Summing Up!

So, we covered Family Floater Health Insurance Plans in detailed - the features, benefits, drawbacks. We hope that you can now make a decision as to whether your family needs to be covered under a family floater plan.