Floater policy is an insurance policy that has only one sum insured although it may cover many items or family. No division of the total is shown on the policy and the policyholder is often able to add or remove items from the cover without reference to the insurers, provided that the total sum insured is not exceeded.
Till a few years back it was a corporate concept only but now most insurers offer floater plans which cover you and your family. Family floater will be cheaper, but make sure you take adequate cover or it will prove costly in the long run
Family floater policies cover all members of a family under one umbrella—
- They charge less premium when compared with the total premium paid for separate individual policies for all members of a family
- Involve less paperwork and
- Have a single window for any claim process.
While it is recommended to have a floater for all families, having only that as your health insurance is not advisable.
How is the premium/sum assured ascertained?
A floater policy considers a family as a single unit and insures it as a whole. So, each member doesn’t get a separate policy. Each family member is covered for the sum insured chosen under a single policy.
The premium is based on the oldest family member’s age and the number of dependants. Medical tests depend on the medical history of each family member.
The sum insured is meant for the entire family and not for each individual. For example, under a floater policy for a family of four—both spouses and two children—with a sum insured of Rs2 lakh, the entire family will be covered for up to Rs2 lakh for one year. The amount is not split across family members. The entire cover could go towards the treatment of one member.
Advantages:
A floater policy has the cost advantage. For instance, if the oldest member of a four-member family is 35 years old, you would have to pay a premium of around Rs.7,752 for a sum insured of Rs.3 lakh against Rs14,364 if you bought individual policies for each member.
Stand-alone health insurers, offer other benefits like –
- Apollo Munich Health Insurance Co. Ltd covers maternity costs after the fourth year through its floater policy and after the sixth year in its individual policy.
- Max Bupa, starts covering maternity costs immediately.
Important:
A floater policy could work out expensive; like in case you have a floater policy with a Rs2 lakh cover and in one policy year, more than one member of your family needs medical treatment. If Rs2 lakh is insufficient you may end up paying from your own pocket.
Most insurers offer a cover of up to Rs5 lakh on floater policies but stand-alone health insurers give higher coverage. For instance, Max Bupa offers up to Rs50 lakh as sum insured; Apollo Munich and Star Health and Allied Insurance Co. Ltd offer up to Rs10 lakh each. However, Star Health comes with deductibles, i.e., the cover is given only if the claim is above a certain limit. Some general insurers also offer higher cover, including Bajaj Allianz General Insurance Co. Ltd that gives a cover of up to Rs10 lakh and some public sector insurers.
Considerations:
To buy a floater policy you need to assess the amount of cover that would be enough for the entire family considering the various risks and keeping in mind the high medical inflation.
Ideally a couple should choose not less than Rs3 lakh and it should be higher if kids are to be included in the cover.
Right time:
Best time to buy a floater policy is when you are starting a family. A floater policy should be treated as a top-up to your existing individual health insurance. Though it should be a cost effective purchase as if the age gap between the oldest member and the youngest member of the family is huge, then one may end up paying a higher premium. However, floater policies are best seen as a cheap top-up option to an individual policy for an individual who is starting a family.
To conclude:
Family packages always work out cheaper, be it deals to the shopping offers in your nearest retail store and same is true for Health Insurance as well. But it has to be borne in mind that even if your employer gives you a floater, you need one at an individual level too and make sure the cover is adequate.
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