New family floater plans are cost-effective but inflexible, here's why

New floater plans covering a large number of family members are cheaper, but enhancing the sum assured can be tricky

In this age of nuclear families, a couple of insurers have launched health insurance plans that cover all the members of a joint or extended family. All members of an extended family can be a part of the policy, irrespective of where they live. These policies offer a few advantages. Senior citizens, who find it difficult to get health insurance, can be included in them. As many as 19 relations can be covered in a single plan. Traditional family floaters don't cover more than two adults and four children in a policy. If a couple wants to include their parents, they have to buy a separate floater plan for them. Max Bupa’s Heartbeat Family Health Plan initially covered up to 13 relations but now covers 19. Royal Sundaram too recently launched Family Plus, which also covers 19 relations.
 
These plans provide two levels of sum insured. There is an individual sum insured for each family member and a separate floater component that can be used by any of the family members after they have exhausted their individual quota. “Provided a family chooses the right combination of individual and floater components, it will be adequately covered because this policy provides a double layer of coverage," says Nikhil Apte, chief product officer, Royal Sundaram General Insurance. A family consisting of six members - husband, wife, two children and two parents - can opt for an individual sum insured of Rs 500,000, and a common floater sum insured of Rs 1.5 million. The family will get a total cover of Rs 4.5 million worth of sum insured: Rs 3 million worth of individual covers and a floater sum insured of Rs 1.5 million. In extreme cases, even if both the individual and the floater plan get exhausted, there is a reload option that can restore the common sum insured for everyone without additional cost. According to Vaidyanathan Ramani, head-product and innovation, Policybazaar.com, these policies are more price efficient than separate policies. If a three-member family with two adults of 35 years and one child opts for the Family Plus plan of Royal Sundaram with an individual cover of Rs 500,000 and a floater of Rs 1 million, the total sum insured will be Rs 2.5 million, and the first-year premium will come to Rs 32,248. If the same family opts for three individual policies, the total first-year premium will be Rs 18,447. If they wish to add a Rs 1 million family floater cover for the same three members, the additional premium will be Rs 16,807, which will come to a total of Rs 35,254 for the family. That is about Rs 3,000 more.  
 

Choose your individual and floater components carefully while buying this policy. “If you choose your combinations carefully, you will get a lower price compared to two floater plans,” says Ashish Mehrotra, MD & CEO, Max Bupa Health Insurance.
 
One disadvantage of such a policy is that all the members have to agree even if only one member wishes to increase the sum assured. If the sum assured is increased, it has to be for everyone. “If certain members want to increase their sum insured separately, they will have to opt for a separate super top-up policy,” says Ramani.