Health insurance is indeed an important part of financial planning. Numerous financial advisors recommend the purchase of a health insurance policy due to the numerous benefits it has to offer. Such an insurance product offers coverage against medical expenses arising due to hospitalisation. A health insurance policy covers numerous expenses such as nursing charges, cost of medicine, room rent, and cost of surgery, among others. Given the rising medical inflation, such expenses may burn a hole in your pocket. You may, therefore, purchase a health plan and have peace of mind knowing that you are covered at all times.
If you are looking to invest in a health insurance plan, it is important to know that there are two major types of plans available in the market. They may be classified as individual health cover and family floater health insurance. Both these types of health insurance plans have their own set of features and benefits.
A case study
Mr. Ramesh Kulkarni, a 30-year old working professional, purchased an individual health insurance plan with a sum assured amount of INR 5 lakh. Three years into his policy, he had to undergo a major surgery. The hospital expenses amounted to INR 1.2 lakh. As Mr. Kulkarni opted for a cashless plan, the insurance provider settled the bill with the hospital itself. Therefore, Mr. Kulkarni focused on receiving quality treatment without having to worry about arranging finance for the same.
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A couple of years later, Mr. Kulkarni’s brother and aging parents came to live with him. Acting on an advice from his friend, Mr. Kulkarni decided to invest in a health insurance plan for the family that covered his brother and dependent parents. He not only enjoyed the benefit of a lower premium but also availed of a higher sum assured amount.
The above-mentioned example highlights the fact that the type of policy you chose depends on your circumstances. If you wish to cover your near and dear ones, then you may opt for a family floater health insurance. You may understand that both types of policies have a host of benefits and unique features.
Understanding the difference between the two types of plans
A family floater health insurance plan covers the entire family under a single plan. The premium amount is, therefore, lower as compared to an individual plan. Besides, such a policy offers a higher level of coverage. Additionally, it is easy to add a new family member as and when you wish to do so. However, it is important to note that renewals on this type of a health cover are allowed up to a certain age. Hence, if a senior citizen breaches the maximum renewal, the benefits of the policy ceases to exist. Besides, if any member utilises the entire sum assured amount, other members of the family may not enjoy the coverage.
An individual health insurance plan, on the other hand, is well apt for those individuals who wish to cover their individual self. Here, if you do not make a claim during the policy year, you may enjoy the benefit of a No Claim Bonus (NCB) in your next policy year. However, in the case of family plans, the NCB stands nullified if any member makes a claim.
While deciding which type of policy to invest in, it is imperative to make a careful analysis of both the available options. You may identify your needs and requirements, and opt for a plan that is well-suited to your needs. You may, therefore, weigh the pros and cons of both the types of policies before making a final choice.