It pay for the actual expenses incurred during hospitalisation either by reimbursement or by cashless claim up to the total sum insured under the health insurance plan
Fortunately, over the last few years, there has been significant growth in awareness around cost of healthcare in our country and also how health insurance plays a significant role in mitigating the risk of unexpected financial loss due to medical emergency.
Indian customers are often concerned about the rising health insurance costs for an adequate coverage. However, they need not worry as there is immense innovation happening in the health insurance space.
However, one thing that most people are yet not sure about is whether to invest in multi-individual health policies or buy a family-floater plan that covers all the family members under one single plan.
Both of these plans are indemnity based plans, i.e. they pay for the actual expenses incurred during hospitalisation either by reimbursement or by cashless claim up to the total sum insured under the health insurance plan.
Deciding on which one to choose is always difficult as both come with their own set of pros and cons. However, the solution completely depends on various factors such as income, premium paying capacity, specific financial goals, size of family and employment type.
A multi-individual health insurance policy means a separate sum insured for each family member while being protected one individual policy. A multi-individual health insurance plan has to be bought in the name of all the members who wish to get insured under the plan that could be both the spouses, children and dependent parents etc. Apart from every family member gets individual cover, discounts are also available for enrolling multiple insured members in a single policy. The insured members can even avail OPD along with no claim bonus. On the premium aspect, overall premium of five lakh plus five lakh multi individual is significantly cheaper than 10 lakh floater plan.
In contrast to this, under a family floater plan, the entire limit or sum insured can be utilised by any one of the insured family member including husband, wife, kids and dependent parents, if any. For instance, if you buy a family floater health plan with Rs 10 lakh, then any of the family members can utilise the entire sum insured. A family floater plan offers great flexibility in terms of utilising the overall insurance coverage among the group. Here, it may seem that a family floater plan is always more beneficial when insuring two or more members of a family, however this isn't the case.
The point to be considered is that the Rs 10 lakh cover is floating across all the members of the family. The implication is that if any one member of the family is hospitalised and consumes Rs 5 lakh of the cover, then a balance of only Rs 5 lakh is left for all the other members of the family, to be utilised for the rest of the year. The premium in a family floater is calculated keeping in mind the eldest member of the family. Therefore, the premium that the kids are paying is computed based on the parent's age. In the family floater the entire group pays the premium considering age of the eldest member in the family.
Under such circumstances, it would certainly make more sense to go for multi-individual health cover. Under such plans, even if in the rarest of rare cases where the entire family because of some illness or some water borne diseases is hospitalised together, they have independent covers without any effect on the other members' sum insured.
The writer is business head, health insurance, at Policybazaar.com
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