How do you choose between individual and family health insurance plans?

What is a family floater health plan? 

This typical health cover covers the full family under a single umbrella plan. One single sum insured is shared among all the members included. This means that all the included family members can avail of the policy benefits up to the sum insured limit. The premiums of such plans are decided based on the age of the oldest family member and the chosen coverage span.  

You must note here that the existing coverage gets shared among all the family members in the chosen policy as required. Such exclusive comprehensive coverage for all the family members proves more reasonable than separate plans.  The claims get settled according to the specific regulations of the chosen insurer and the plan terms.  

Individual health insurance 

This is a very popular form of health insurance, ideally designed to cover one individual. Each family member needs to maintain a separate health plan under this system. The principal determinants of premiums for this kind of plan include the current health status, age, and probable risk profile of every insured individual.  

If you aren’t seeking health coverage for multiple family members, then you can go for this. Moreover, if there are members in your family who require special coverage for critical illness, cardiovascular issues, cancer, etc., it is best to maintain separate health plans.  

Differences between individual and family health insurance plans 

The key differences between individual and family health insurance plans are as follows: 

Flexibility and coverage:  

In the case of an individual plan, the sum insured amount can be utilised flexibly as and when needed by the insured individual.  
However, in a family floater plan, the total sum insured amount is shared among all the family members. If one exhausts a considerable amount, it may come in the way of others till plan renewal.  
 
Pro Tip: If you have a senior citizen or a member with a critical ailment for whom there could be multiple claims in one year, it is best to opt for a separate individual health plan for that person rather than including him/her in the family floater plan. 

Premium calculation:  

The oldest family member's current age and health status are the significant determinants of the premium payable amount in the family floater plan. However, the age, health profile, and associated risks are considered in individual plans. This may vary for each member, thereby altering the premium. 
 
Pro Tip: Ideally, a family floater plan should be taken for members of similar age. A separate family floater plan can be taken for senior family members. 

Coverage for dependents:  

A standard family health plan allows coverage for the whole family, including the principal policyholder, spouse, dependent children, and sometimes dependent parents. Some plans also allow coverage for parents-in-law as well. 
 
An individual plan only covers the insured person concerned. Each family member requires a separate individual plan to ensure coverage. 

Price:  

The price of a family floater plan is slightly more reasonable than maintaining separate health plans for every individual family member, especially when there are more than 2 members. 

Let’s understand the basic difference between the two. 

Aspect	Individual Health Plan	Family Floater Plan
Coverage	Separate coverage for every insured	It gets shared among all the included family members
Premium Calculation	Based on the age, health status, and risk profile of the insured individual	Based on the age and health status of the oldest family member, included
Dependent Coverage	Solely covers the insured person	Spouses, dependent children, and sometimes dependent parents are covered
Price	Depends on the policy choice, coverage span, etc.	A single premium for every member might be lower than a single policy for every member.

 

Individual health plan vs. family floater plan: which works best for whom and why? 

While making the choice, you must critically analyse the specific conditions of your family. If multiple members are without coverage, then choosing a family floater plan could be a favourable solution. However, if that is not the scenario, you can choose individual health plans. Nevertheless, whichever you choose, you have to research multiple plans and grab the best deal critically. 
 
For example, individual health plans work best for young professionals, single people, or those without dependents. It works for senior citizens or high-risk individuals with pre-existing medical conditions or a higher likelihood of claims. Also, if you have specific requirements like critical illness coverage or maternity requirements, individual plans could be a better solution as they can be customised to meet your needs. 

On the other hand, a family floater plan is a better solution if you are looking for coverage for a young family with couples and small children, with a low likelihood of simultaneous claims. Also, for families without chronic illnesses or pre-existing conditions requiring frequent claims or if you need an economical option, you could avail of a family floater plan.