Nowadays, inflation has hugely impacted healthcare costs. Every household spends a significant portion of its savings on medical bills and medicines. Particularly for families with elderly parents suffering from critical illnesses like diabetes or hypertension, medical expenses can significantly exceed the income levels of all earning members. Therefore, to cover the medical costs of an entire family, it is necessary to buy adequate health coverage.
Now, the real challenge is to choose the type of health coverage: an individual health insurance policy or a family floater health insurance. Both types of health insurance have their benefits and limitations.
This article will help you understand the individual features of both types of health coverage and choose the right one for your family’s healthcare needs.
How does an individual health insurance plan work?
Individual coverage provides coverage for each person separately and ensures that each person’s beneficiaries receive a payout. It offers more flexibility in terms of policy amounts and features. Each policy continues regardless of what happens to the other person.
Given below are the features of an individual health insurance plan:
- Affordability: Generally, the premiums paid for such a type of health insurance plan are more expensive than a family floater plan. Provides coverage for each person separately
- Flexibility: Offers more flexibility in terms of policy amounts and features.
- Simplicity: Due to multiple policies, it is more complex than a family floater.
- Long-term value: Individual health insurance policies offer greater long-term value because each policy remains in effect independently of the other person’s circumstances.
These are some salient features of individual health insurance policies, which make them popular among youngsters.
What is a joint health insurance policy?
Joint coverage health insurance, also known as family floater health insurance, often costs less than two individual policies. Since there is only one policy, it can be simpler to manage. A family floater health insurance plan is also suitable for covering shared expenses or debts in case of a policyholder’s death.
How does joint health insurance work?
Joint or family floater health insurance is an affordable type of coverage that works on a shared coverage model.
- The entire sum insured in a joint health coverage is shared equally among all family members against payment of a single premium.
- The joint health coverage premium is decided on the basis of the age of the eldest family member’s age.
- The joint coverage can be used multiple times by different family members for same or different diseases.
This makes it more affordable and simpler to manage than separate health insurance policies for each family member.
Difference between individual and family floater health insurance policy
Both individual and family floater health insurance function similarly. The difference lies in the insurance cost and benefits utilisation. Here are the broad differences between the two types of health insurance policies:
| Feature | Individual health insurance | Joint health insurance (family floater) |
| Coverage | Covers a single individual. | Covers multiple family members under a single plan. |
| Premiums | Premiums are calculated based on the insured person’s age and health condition. | Premium determined by the age of the eldest individual covered in the policy. |
| Sum insured | Sum insured is exclusively available to the individual policyholder. | Sum insured is shared among all individuals included in the policy. |
| Flexibility | Caters to the unique healthcare requirements of a single person. | Provides health insurance protection for all family members under a single plan, covering the medical expenses of all. |
| Renewability | It is renewable for the individual as long as premiums are paid. | It is renewed annually; renewal premium may change based on factors like the eldest member’s age and claim history. |
Which type of health coverage is better for my family: individual or joint?
The choice of health insurance type purely depends on the health requirements, budget constraints, and the size of your family.
- Individual health insurance offers broader coverage for a higher premium, whereas a family floater policy covers the entire family under a single, often lower, premium.
- Premiums are based on the policyholder’s age and health status for individual plans, or the eldest family member’s age for family floater plans.
- The number of family members determines the coverage scope in a family floater plan, while the policyholder’s age and add-on benefits determine the scope in individual health insurance.
Therefore, considering these factors, you should choose the health insurance policy that best suits your family’s health needs and budget.
Wrapping Up!
Now that you are familiar with the features and benefits of individual health insurance and family floater health insurance. You can now decide which type of health coverage best suits your family’s medical requirements and budget. When choosing between these health coverage options, remember to compare policies online, check policy benefits, review the insurance provider’s network, and confirm your preferred doctors are in the network.