Family health insurance vs. multiple individual health insurance: which is the best option?
Health insurance is considered the first thing that a successful person should purchase, before even starting the investment journey. Why? Because life is uncertain and a sudden health crisis can create enormous upheaval – both financial and emotional.
A good health insurance plan can help you weather the crisis smoothly. However, when it comes to buying the right plan, one has to decide whether multiple individual health policies or a family floating plan is best for him.
Unlike floating family health insurance, which can protect you and your family members under one plan, individual health insurance only covers one person.
To provide family health coverage through multiple individual plans, you will need to purchase separate policies on behalf of each individual. In this case, the premium will depend on the age of the person and the sum insured. Some insurance companies may also offer you a discount on the total premium if you purchase individual policies for more than one family member simultaneously.
Under the floating family policy, several family members can benefit from health cover under the same plan. And only one premium should be paid. Usually the premium is based on the oldest member in a floating family policy.
One of the benefits of having multiple individual plans for family members is that the sum insured for other members would not be affected if someone is admitted to a hospital or undergo any other treatment covered by their individual plan.
On the other hand, all members can benefit from the entire sum insured in a floating family policy. This means that full health coverage would not be possible if several members were to be admitted simultaneously to a hospital.
What is better?
According to Deepak Yohannan, CEO of MyInsuranceClub, it would be best to have multiple individual plans in terms of coverage. However, it would cost more in terms of the premium paid.
The family floating policy is cost effective because it covers several members of a family and takes advantage of the fact that several members are unlikely to have health coverage at the same time. But if a claim is made, it would be difficult to increase the amount of coverage.
âHaving multiple individual policies is definitely better from a coverage standpoint. Family floating plans are certainly more profitable in the absence of a claim. But once a member makes a claim, the cost of the floating policy for the whole family increases. In individual plans, only the requesting plan will be impacted and not the others. And once you’ve made a claim, it can be difficult to improve the amount of coverage – the cost of medical facilities can increase dramatically over a 10-year period, âYohannan told FE Online.
âSo if you can afford it, take separate individual shots. If cost is a major factor when taking the plan, go for family floating plans, âhe added.
One should choose one of the two health insurance options according to his needs. For example, if someone’s income is lower and they have small children, a floating family policy would be better. But if a family member has a history of poor health, it would be more helpful to purchase individual policies as the cost of treatment can be very high.