Everything You Need to Know About Family Floater Health Insurance

Since your family's well-being is one of your top priorities, it is only normal for you to be fussy and picky about what you choose for them. Besides other things, you must be extremely careful about decisions you make to ensure their safety and good health. With escalating healthcare costs in India, investing in a robust health insurance policy for your family and yourself can prove extremely useful in the time of an unexpected medical crisis. After all, nobody can undermine the importance of health insurance, especially in the face of a medical emergency.

Heath Insurance Evolution  

The concept of insurance was present in ancient India and you can find the proof in Manusmriti, Dharmashastra and Arthashastra ​ancient texts referred to for dealing with socio-economic, political and other public issues. Formally, health insurance was first introduced in 1694 by Hugh the Elder Chamberlen. In the middle-late 20th-century, disability insurance gave way to new health insurance programs and after amendments and innovations, health insurance came into existence.

The modern health insurance sector in India is a few decades old. After independence, there was considerable improvement in the primary healthcare sector. The Employee's State Insurance Scheme (ESIS) came into effect in 1948. It started as financial protection for blue-collar workers of the organised sector and provided healthcare services through a network of dispensaries and hospitals that were empanelled with ESIS. The coverage under ESIS included OPD and IPD expenses and cash benefits. They compensate for the loss of pay and other medical contingencies. This scheme is still in practice and is financed mainly by the contribution of employers and employees. In 1954, a Central Government Health Scheme (CGHS) was introduced. It started as a contributory health scheme to provide comprehensive healthcare services, particularly for the central government employees and their families. The government of India and central government employees contribute a nominal amount per month based on their pay scale; the system is still going on.

In India, with approximately 38% of the population insured, health insurance has a low reach. There are many reasons for people not availing of health insurance and lack of awareness and knowledge is one of them. Many people are not aware of why health insurance is important. Also, there are many misconceptions regarding the policies available in the market.

Why Health Insurance?

Medical emergencies strike suddenly and can leave everyone bewildered. It is crucial to be well-prepared to get quality medical treatment for your family in case of an unforeseen event and it is best to get a floater health insurance policy for this purpose. The importance of health insurance in India is that it provides financial protection against treatment costs for a wide range of diseases. So, prepare to stay financially covered against any medical emergency. Get complete health insurance for your family through a floater policy. You will also get a tax deduction under Section 80D of the Income Tax Act and can save a considerable amount on your income. The reason why you should get a family floater plan instead of individual plans is that it will save you from the hassle of remembering renewal dates of many policies, their terms and conditions, separate claim processes and so on. Also, in most cases, a floater plan is cheaper than buying separate policies for every member of your family. The reasons for getting a health policy include:

1. To fight lifestyle diseases

Lifestyle diseases are on a rise among Indians under the age of 45 years. High cholesterol levels, diabetes, high blood pressure, stress, obesity, body aches and pains are some examples of the diseases. Heavy workload and negligence towards health are the two primary causes of most health conditions. Often, these diseases lead to heart attack, stroke and major organ failures which may require immediate hospitalisation. Every year the percentage of people getting affected by these diseases are increasing. This explains the need for health insurance policies in dealing with treatment costs. Robust health insurance will take your mind off the healthcare costs and allow you to focus on the treatment. Plus, the free annual health check-up process for policyholders will help you in becoming aware of any health issue at the early stages.

2. To safeguard your family​

All family members can get covered for medical treatment under a single policy instead of relying on different policies for each member. A family floater policy covers your spouse, children, elderly parents and self. It would also ensure that you do not have to compromise on the medical expenses for any member. Nowadays, hospital bills can be excessively high, especially if you want quality treatment at a super-speciality hospital. The consultation and diagnostic charges are even more for critical illnesses and surgical procedures. With a family floater plan, you get a single sum assured for the entire family. Claim the entire amount for any of the members when required. In the unfortunate event of the death of any of the members, the policy will not terminate. It will be valid for the rest of the family members with the ongoing benefits.

3. To counter inadequate insurance cover

You may have a health cover from your current employer that includes your family members but it can be inadequate. Also, you would be covered only as long as you are an employee of that organisation and if you change jobs, you will lose the cover. An additional policy or family floater purchased from a reliable insurer would ensure that there is no shortfall of financial cover during treatments. This can reduce the stress related to money matters and you can concentrate on the treatment process instead. Some plans include treatment costs for COVID-19 in the form of short-term policies—an essential feature due to the ongoing pandemic situation. With a family floater, you can add new members under the existing policy. For example, a newborn child can be covered in future.

4. To deal with medical inflation

With the rise in medical inflation, it can be quite difficult to go for treatment in super-speciality hospitals or pay for an expensive surgery in the face of an emergency. A health policy would be helpful in such situations as the insurer would take care of the expenses, provided that it is under coverage limits. Under Section 80D of the Income Tax Act, the premium that you pay towards health insurance coverage under 80D are exempted from your income tax liability for a particular financial year. This exemption is available on individual plans and family floater plans that cover you, your spouse, children and your parents. If you and your parents are senior citizens, the maximum deduction that you can claim would be Rs 1,00,000 = Rs 50,000 (for self above 60 years of age) + Rs 50,000 (for senior citizen parents).

5. To protect your savings

You get the benefit of cashless claims at network hospitals where your insurer has tie-ups, which means at these hospitals you do not need to pay anything out of your pocket. This way there is no draining of your savings during hospitalisation or treatment of your family member. In fact, you may get higher discounts from your insurer if more members are added under a family floater plan. The rate of discount varies among insurers based on the number of members covered in the plan. Also, you can get additional discounts if you buy the health policies online as there are no brokers or intermediaries involved and no paperwork to pay for. This way, insurers can save more and can share the savings with the policyholders. You may get discounts during the online renewal of policies as well.

6. Insure early to stay secured

One of the ways to stay secure in advance against any health issue is by purchasing a health insurance plan when you are young. It would also be cheaper if you buy a policy at a young ​​​​