With the growing medical inflation coupled with the rise in lifestyle and infectious diseases, having a sum insured under a health insurance policy has become mandatory. Health insurance coverage will help a person access quality healthcare services and ease the financial burden off his shoulders during unexpected medical emergencies.
 With the rise in awareness about the importance of purchasing health insurance coverage among the public, insurers have introduced numerous policies in the last few years to increase the number of choices for customers. As a result, choosing the right health insurance cover has become crucial and requires careful consideration to avoid last-minute regrets.
One of the common confusions that continues to prevail in Indian households while trying to choose the best health insurance policy is whether to invest in a multi-individual health plan or purchase a family-floater plan. To start with, both are indemnity-based plans. It means the insurer will pay the actual incurred medical expenses by reimbursement or cashless claim up to the total sum insured under the policy. But both plans have pros and cons, and a complete understanding is required to make a sound decision.
What is a multi-individual health insurance policy?
A multi-individual policy is a type of health insurance cover that protects multiple individuals while providing a separate insurance amount for each of them. It means separate plans need to be bought in the name of all the individuals, like spouses, children and dependent parents, who wish to get insured. Since the individuals do not share their insured amount with other members under this cover, exhaustion of coverage amount will not impact others. The age of the insured and the sum he wishes to insure determine the policy’s premium.
What is a family floater health insurance policy?
It is a health insurance cover that covers different members of the family under a single policy, and the insured sum is shared among the insured family members. If one of the insured members claims a certain amount from the premium for their medical expenses, only the remaining amount will be available for the rest of the family members. For example, if a family of four purchase a family floater policy with a premium of Rs 10 lakhs and one of the members claim Rs 7 lakh, then only the remaining Rs 3 lakh will be available for the remaining members. The premium of the policy depends on the age of the family’s eldest member.
The difference between multi-individual and family floater covers:
Though both policies have their pros and cons, it is advisable for a policyholder to choose the best health insurance policy based on their requirement. Some of the common differences between them are as follows.
1. Individuals insured under multi-individual health insurance policy will have dedicated coverage. Since each person has their own policy with a dedicated insured sum, their claims for hospitalization or outpatient treatment costs do not affect the coverage of other individuals included in the policy. But the scenario is entirely different in family floater policy. Since insured family members share a particular sum, usage or exhaustion of the insured sum will impact the coverage available for other members.
2. Multi-individual health insurance policy lets each member of the policy customize their plans without affecting the coverage of other members. It means a member can make changes to their cover, like enhancing their coverage or adding an add-on. Unlike the family floater policy, it allows an individual to tailor-suit their coverage to meet their own requirements without considering other members’ requirements. This is considered most beneficial when the insured has any specific health concerns.
3. A family floater policy is highly cost-effective since it covers multiple family members under a particular insured amount. This policy is highly beneficial until two family members require health coverage around the same time or during the no-claim years. Also, enhancing the cover amount once a claim has been made would be challenging.
4. Insurance companies will provide a bonus either by increasing your coverage or by giving a discount on the annual premium amount for every claim-free year, and it is called a no-claim bonus. The benefit is available in both the multi-individual and family floater policies. But in the case of the family floater policy, even if one of the family members makes a small claim, they will not become eligible to avail of the no-claim bonus. That’s not the case with multi-individual policies since each individual has their own policies.
5. Though availing of a multi-individual cover offers the policyholders greater peace of mind because each member has their own dedicated coverage, it is often difficult for the insured to read, understand, choose and maintain different policies for multiple individuals of a family.
Conclusion:
Since both the multi-individual and family floater policies have advantages and disadvantages, it is always recommended to understand the policies and hand-pick one based on their requirements. By doing so, a policyholder can manage their financial expenses better during the crisis without having to take a financial toll.
