Health insurance policies allow you to manage medical and healthcare costs without burning through your savings. When you are planning for medical expenses, you always take your family and loved ones into consideration. You can buy independent health insurance policies for each of your family members or opt for a family health insurance plan. As the name suggests, a family insurance plan allows you to include your spouse, children, and parents. Some insurers also allow you to include your dependent in-laws in the family policy.
A family health insurance policy has a single sum insured that is shared by all the members of the family in the plan. There are many benefits of a family health insurance plan, including:
- These plans allow you to get coverage for the entire family via one plan.
- The premium on these policies is much cheaper than the total premiums payable if you were to purchase individual plans for each family member.
- If you opt for a family floater policy, then every member can get a higher coverage as compared to individual policies.
- Some family plans include maternity coverage that can be particularly beneficial for young couples.
- Comprehensive policies can help you cover major medical costs and critical illnesses with ease
- You can easily add new members
- There are tax benefits to be availed too
Does the number of family members matter in a family health insurance policy?
Usually, a family health insurance plan covers a family that includes a couple and up to four children. Some plans allow you to include your dependent siblings or parents and/or in-laws in the family policies too.
The way a family floater plan works is simple. The total sum insured can be used if any family member needs medical attention. Therefore, if you have a family health insurance policy with a coverage of ₹15 lakh and your spouse needs to get a medical treatment done for ₹3 lakh, then you will have ₹12 lakh left for the family for the policy period.
However, it is important to remember that as the number of people increases, you will need a higher sum insured. Taking the example cited above, if you have originally insured yourself and your spouse, along with your child, then the cover of ₹15 lakh implies ₹5 lakh per person on average. However, if you subsequently decide to include your parents in the plan (provided the insurer permits it), then you might have to increase the sum insured based on their health condition and healthcare requirement. This would mean an increase in the premium amount too.
Apart from the number of family members in the health insurance plan, their age and health conditions are important too. Typically, when insurers calculate the premium of a family insurance plan, they base it on the age of the oldest member in the family. Therefore, if you and your spouse are in your thirties and have two kids less than 10 years of age, then including your parents who would be 60+ years of age can increase the premium amount greatly. Hence, looking for health insurance for a family of 4 is your best option, and buy a separate senior citizens plan with relevant benefits for your parents/in-laws. Also, if you have a family member with a specific medical condition, then getting a separate insurance plan for that member is usually recommended.
Choosing the right family health insurance plan
While choosing a family floater plan, you need to keep a few aspects in mind:
- Since the sum insured is used by all family members, you must ensure that the amount is sufficient. If one member has a pre-existing condition or if the family has a history of certain illnesses, then you must ensure that you factor them in, while determining the sum insured.
- As explained above, if a family member above 60 years is included in the policy, then the premium rates increase too. Also, such members usually take up most of the sum insured. Hence, you must consider buying a separate policy for senior citizens to ensure that they are adequately covered.
- Look if the insurer is offering a co-pay option. This can help you reduce the premium amount by paying a certain part of the total claim amount.
- Read the fine print carefully. Know the limits, inclusions, and exclusions well to avoid the rejection of a claim later.
We live in times when medical inflation is around 18%, and medical costs are rising every year. Hence, health insurance is a must to ensure that you are financially prepared to handle medical costs in case of any emergency in the future. Ensure that you research your options well and consider your family’s medical requirements to choose an insurance policy that works best for you. Prominent insurers like Tata AIG offer attractive add-ons and riders that can help you customize the policy. Talk to the insurer and clarify all your doubts before buying.