Family Floater Health Insurance Plans – A Quick OverviewOkBima 19 Aug 2023
We constantly work to provide our loved ones with the best life. It could be to attain a high standard of living or have an adequate backup for emergencies. One such essential component is a family floater health coverage policy. A cost-effective alternative to purchasing individual plans, it covers all your medical bills. Thus, let's learn more about health insurance's benefits and how it works.
What is a Family Floater Health Insurance Plan?
A Family Floater Health Insurance Plan is a type of health insurance policy that offers coverage for all members of a family under a single umbrella. Instead of purchasing individual health insurance policies for each family member, a family floater plan pools together the total coverage amount, which can be utilized by any insured family member as and when required.
The Advantages of Family Floater Health Insurance Plans
Plans for family floater insurance policies offer many advantages for risk-free coverage. Here are a few of the main benefits that you should be aware of:
The simplicity of adding more individuals to a family floater medical coverage policy is its most advantageous feature. It is easily accomplished if you have an infant or wish to add another dependent person to the plan. You can save money with this form of policy compared to purchasing an independent health insurance policy for the person.
The premium for a family floater policy is significantly less expensive because it protects every family member under a single policy. The yearly premium cost might make a hole in your savings if you had to purchase individual coverage for each member separately. As a result, family floater insurance premiums are affordable and protect the medical costs of all of your loved ones.
Insurance companies have a predetermined number of network institutions where you can receive care, and they deal directly with the hospitals to cover the expenses. When the medical cost is directly cleared with the insurer, this is referred to as cashless hospitalization. So you can avoid the time-consuming reimbursement process and receive the treatment you need for practically nothing.
Section 80D of the Taxation of Income Act of 1961 allows you to receive tax benefits after buying a family floater policy. Income tax deductions are available for the policy premium payments. To get the most out of your policy, it is suggested that you not choose health insurance merely to save on taxes.
How Does Health Insurance for Families Floater Work?
Health insurance for families floater is a popular and practical choice for providing comprehensive health coverage to the entire family under a single policy. This type of health insurance offers numerous benefits and convenience, making it an ideal option for families looking to secure their health and financial well-being. Let's delve into a detailed explanation of how health insurance for families floater works and why it is a valuable investment.
1. Coverage for the Entire Family
A family floater health insurance policy covers all members of the family, including the policyholder (usually the primary earner), spouse, dependent children, and sometimes dependent parents or in-laws. This collective coverage ensures that the health needs of the entire family are addressed under one umbrella policy.
2. Shared Sum Insured
One of the primary features of a family floater plan is the shared sum insured. Instead of allocating individual sum insured for each family member, the policy pools together a total sum insured that can be utilized by any insured family member as needed. For example, if the policy has a sum insured of INR 10 lakhs, any family member can use the entire amount or a portion of it for their medical needs.
Family floater health insurance plans are generally more cost-effective compared to individual policies for each family member. Since the premium is calculated based on the total sum insured and not on individual members, it offers substantial savings while ensuring comprehensive coverage for all.
4. Flexibility in Utilization
The family floater plan provides flexibility in utilizing the coverage. If one family member requires medical treatment that exhausts a significant portion of the sum insured, the remaining amount can still be accessed by other family members in case of their medical emergencies.
5. No-Claim Bonus (NCB)
Many family floater plans come with a no-claim bonus feature, which rewards policyholders with increased sum insured or reduced premium for claim-free years. However, in the event of a claim, the NCB may be impacted for the entire family.
6. Considerations and Limitations
While family floater plans offer numerous advantages, there are some considerations to keep in mind. Age variations among family members may result in differing health needs, necessitating careful assessment of the sum insured to cater to everyone's requirements adequately.
What Is Excluded From Family Floater Insurance for Health Coverage?
Some people may not be covered under a family floater health insurance plan, like non-family members, extended family, or those above a certain age. Pre-existing conditions may have waiting periods, and high-risk conditions or dangerous jobs may be excluded. The plan usually covers the policyholder, spouse, and dependent children. Check the policy details to see who is covered before buying the family floater plan. Consider separate plans for those not eligible under the family floater. Here are some typical family floater health coverage exclusions:
The majority of family floater insurance policies exclude coverage for pre-existing diseases. If any family member has an illness that was identified before the insurance was purchased, the policy may not pay for the associated costs.
Except when the procedure is medically required, costs for aesthetic procedures like hair transplants or plastic surgery are typically not covered by family floater plans.
The coverage might not cover administrative, service, or admission fees because they are not directly connected to receiving medical care.
Family health insurance policies often do not cover the potential medical costs of abusing drugs, alcohol, or other intoxicants.
To be informed of the exclusions, it's crucial to read and comprehend your family floater coverage policy's terms and conditions in their entirety. Based on this information, making judgments regarding your family's health insurance will help you prepare for medical costs that the policy might not cover.
Tax Advantages of Family Health Insurance Policies
In addition to providing your family with complete health coverage, a family floater health insurance plan may also offer tax advantages. A family floater insurance policy has the following tax advantages:
Per Section 80D of the Taxation of Income Act of 1961, premiums paid for a family floater medical insurance policy are tax deductible. For premiums paid for health insurance for oneself, one's spouse, and dependent children, the maximum deduction allowed is Rs. 25,000.
A further reduction of up to Rs. 25,000 is permitted if the policy also covers parents. The deduction maximum rises to Rs. 50,000 if the insured person or the insured parent is elderly.
The policy payout is not taxable under the provisions of the Income Tax Act if it is received in the event of hospitalization or medical treatment.
If your company offers you a family floater insurance policy, the employer's premium payment is not considered taxable compensation for the employee. Nevertheless, it is always wise to choose private health insurance coverage for one's family and for oneself.
For advice on maximizing the tax advantages of your family floater health coverage and the tax consequences of your insurance, it is essential to speak with a tax specialist. And if all else fails, you can get in touch with the experts from Okbima.
In conclusion, family mediclaim insurance is an easy and helpful way for families to guard themselves against unanticipated medical costs. It removes the need to buy several individual plans but includes the medical expenses of every family member under one plan, thereby saving time and money. Family floater insurance often provides a more comprehensive range of medical treatments, making it a practical and economical choice for maintaining your family's health and financial well-being.