Six benefits of a family floater health insurance policy

4 MinsApril 03, 2020

Even those of you who follow a healthy diet and exercise regularly may find yourself needing medical care and treatment, at times. Falling ill and getting hospitalised is something you have no control over. Today, in addition to worrying about your health, you may find yourself worrying about the high hospital bills too, given the rising medical inflation. Room charges, doctors’ fees, medicines, and a bunch of other charges could dent your pocket. A smart way to avoid this to fortify yourself with health/medical insurance. However, buying individual plans for every member of the family can be an expensive proposition. Hence you should consider buying a Family Floater Health Plan.

health insurance policy

As the name suggests, the Family Floater is a plan that covers the whole family under one plan. It is very similar in the way it operates to an individual plan except that instead of covering an individual, it covers all family members.

How does the plan work?

Here is an illustration. Please note that the numbers mentioned are only to explain the product. Please contact your financial advisor/insurance agent for details applicable to your family.

Let us assume yours is a family of four and you, the head of the family, is between 30-35 years of age. You insure your family for Rs 5 lakh under a Family Floater Plan and pay a premium of roughly Rs 10,500. Family premiums are generally calculated based on the age of the oldest family member, which means in this case 30-35 years of age.

Let us also assume one of your family members falls ill and is hospitalised. The total amount spent on the treatment is Rs 3 lakh. The amount will be reimbursed by the insurance company.

If someone else from your family falls ill during the term of the plan and the expenses come up to Rs 2.5 lakh, an amount of Rs 2 lakh (Rs 5 lakh – Rs 3 lakh) will be reimbursed by the insurer. You will have to pay only the balance of Rs 50,000.

Also Read: [Why is it absolutely necessary to buy Life Insurance?]

Here are a few benefits of the Family Floater Plan:

1. Protection for the whole family: All members of a family are covered under it. Hence there is no need to buy multiple plans, track them and spend a huge amount on premiums. While all plans cover a married couple and their children, some plans offer the option to include parents, in-laws and dependent siblings as well.

2. Cost-effective: If you buy individual insurance plans for every member, each premium will make a significant dent in your wallet. A Family Floater plan is very cost-efficient.

3. Easy to make additions: If a child is born, it is easy to add her to the insurance plan. The premium may go up slightly, but the increase is unlikely to be substantial.

4. Wider coverage: Many plans offer both pre-and post-hospitalisation coverage. This offers coverage for 30 days before hospitalisation and 60 days post hospitalisation.

5. Tax benefits: You can claim benefits from tax deductions under section 80D of the Income Tax Act. You can claim deductions of up to Rs 25,000 for premiums paid for self, spouse, children, and parents. If senior citizens are included (you/spouse/parents), then the deduction allowed is Rs. 50,000. That amounts to a possible total tax benefit of Rs. 75,000 annually.

6. Cashless treatment: Most insurance companies have a network of hospitals where you can avail of cashless treatment as long as you intimate the insurance company within 24 hours of getting admitted. This means you do not have to pay from your pocket and then apply for reimbursements.

Axis Bank Offers Family Floater Plans jointly with its health insurance partners such as TATA AIG Health Insurance.

Disclaimer: This article has been authored by The Source, a Mumbai-based content creation, and curation firm. Axis Bank does not influence the views of the author in any way. Axis Bank and The Source shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Please consult your financial advisor before making any financial decision.