Group Health Insurance Vs Family Floater Insurance
- Author :
- TATA AIG Team
- ●
- Last Updated On :
- 11/09/2024
Health insurance is crucial for protecting yourself and your loved ones from unexpected medical expenses. Two popular types of health insurance are Group Health Insurance and Family Floater Insurance. This piece explores the difference between a floater and non-floater policy, so that you can choose the one that might be best for you.
What is Group Health Insurance?
Group Health Insurance, also known as group medical insurance policy, is a kind of health coverage provided by employers to their employees. It's a single policy that covers a group of people, typically those working for the same company.
Key Features of Group Health Insurance
Employer-Sponsored: The company usually pays for part or all of the premium.
Covers All Eligible Employees: It generally includes all employees, regardless of their health condition.
May Extend to Family Members: Most group policies allow employees to add their spouse, children and sometimes parents.
Standard Coverage: The benefits are usually the same for all employees in the group.
What is Family Floater Insurance?
Family Floater Insurance is one type of health insurance that covers multiple family members under a single plan. It's called a "floater" policy because the coverage amount can be used by any or all insured members of the family.
Key Features of Family Floater Insurance
Covers Multiple Family Members: Typically includes the policyholder, spouse, children and sometimes parents.
Shared Sum Insured: The total coverage amount can be used by any insured family member.
Single Premium: You pay one premium for the entire family.
Customisable: You can often tailor the policy to your family's specific needs.
Difference Between Floater and Non-Floater Policy
To better grasp the difference between Group Health Insurance and Family Floater Insurance, it's important to understand the concepts of floater and non-floater policy.
Floater Policy
A floater policy, like Family Floater Insurance, allows the sum insured to be shared among all insured members. This means any family member can use part or all of the coverage amount.
For instance, if your Family Floater insurance has a ₹10 lakhs amount covered:
Your spouse could claim ₹3 lakhs for surgery
Your child could then use ₹2 lakhs for medical treatment
You would still have ₹5 lakhs left for any other family member to use
Non-Floater Policy
A non-floater policy assigns a fixed sum insured to each covered individual. Group Health Insurance policies can be either floater or non-floater, depending on how the employer sets them up.
For example, in a non-floater Group Health Insurance policy:
Each employee might have a fixed cover of ₹5 lakhs
This amount is specific to that employee and can't be shared with others
Difference Between Group Health Insurance and Family Floater Insurance
Aspect | Group Health Insurance | Family Floater Insurance |
---|---|---|
Who's Covered | All eligible employees in a company; sometimes extends to immediate family | Policyholder and specified family members (typically spouse, dependant children and sometimes parents) |
Premium Payment | Primarily paid by the employer; employees may contribute a small portion | Entirely paid by the policyholder |
Cost-Effectiveness | Generally more affordable due to group discounts and employer contributions | Can be cost-effective for young families, but premiums increase with the age of the oldest member |
Sum Insured | Often fixed for all employees; may have tiers based on employee level | Chosen by policyholder; shared among all covered family members |
Customisation | Limited; standardised for all employees in the group | Highly customisable to fit family needs |
Pre-Existing Conditions | Often covered immediately with no waiting period | Usually has a waiting period (typically 1-3 years) |
Claim Process | Often simpler; HR department may assist | Handled directly with the insurance company |
Portability | Tied to employment; coverage lost if you leave the job | Portable; can be kept even when changing jobs |
Coverage Flexibility | May be floater or non-floater, depending on policy structure | Always a floater policy, allowing flexible use of sum insured |
Additional Benefits | May include extras like dental or vision care; often comes with life insurance | Can add riders for critical illness, personal accident cover, etc. |
Sub-Limits | May have sub-limits on specific treatments or room rent | Can choose plans with fewer sub-limits |
Suitability | Best for employed individuals in companies offering good group coverage | Ideal for families, self-employed individuals, or those without employer coverage |
Long-Term Stability | Depends on continued employment with the company | Provides consistent coverage regardless of employment status |
Renewal | Usually handled by the employer annually | Policyholder's responsibility to renew |
Claim Impact | In non-floater setups, claims don't affect others' coverage | Large claims by one member can reduce available amount for others |
Coverage Limits | Set by the employer and insurer in the group policy | Can be chosen based on family needs and budget |
Waiting Periods | Often offers day 1 coverage and waiting periods are waived for most conditions | Applicable for pre-existing conditions and specific treatments |
Network Hospitals | May have a specific network tied to the group policy | Usually offers a wider choice of network hospitals |
Tax Benefits | Tax benefits usually claimed by the employer | Policyholder can claim tax benefits under Section 80D |
Group Health Insurance vs Family Floater Insurance – Making the Right Choice
When deciding between Group Health Insurance and Family Floater Insurance and understanding the difference between floater and non-floater policies, consider these factors:
Employment Status: If you're employed and your company offers a good group medical insurance policy, it's often beneficial to take it.
Family Size and Age: Family Floater plans are great for young families but may become expensive as members age.
Health Conditions: If you have pre-existing conditions, Group Health Insurance policy might offer immediate coverage.
Budget: Consider the cost of premiums and your ability to pay, especially for Family Floater plans.
Desired Coverage: Think about what health risks you want to cover and what additional benefits you need.
Job Stability: If you change jobs frequently, a Family Floater plan provides continuous coverage.
Customisation Needs: If you want a tailored health plan, Family Floater offers more flexibility.
Long-term Planning: Consider how your health insurance needs might change over time.
Claim History: If you have a history of frequent claims, a non-floater policy might be more suitable.
Geographic Coverage: Check if the policy covers treatment across different cities or countries, if relevant to your lifestyle.
Family vs Group Health Insurance – Which One Should You Choose?
Both Group Health Insurance and Family Floater Insurance have their advantages and understanding the difference between floater and non-floater policies is key to making the right choice. Here's a simple guide:
Choose Group Health Insurance if:
Your employer offers a comprehensive group medical insurance policy
You want immediate coverage for pre-existing conditions
You're looking for the most cost-effective option in the short term
You don't mind standardised coverage
Choose Family Floater Insurance if:
You want a customised plan for your family
You're self-employed or your employer doesn't offer health insurance
You want the flexibility to keep your coverage when changing jobs
You prefer a floater policy where the sum insured can be shared among family members
Conclusion
Remember, the choice depends on your unique situation. Some people even opt for both – using Group mediclaim policy as primary coverage and a Family Floater plan for additional protection.
Whichever option you choose, having insurance is crucial in today's world of rising medical costs. It provides financial security and peace of mind which ensures that you and your loved ones can access quality healthcare when needed.
Take the time to understand your options, compare different plans from reputable insurers like TATA AIG that offer SME insurance and family floater plans, and choose one that best fits your family's health needs and financial situation.
FAQS
Is family floater better or individual?
Family floater policy covers multiple family members under one plan, often at a lower cost. Individual policies provide separate coverage for each person. The better choice depends on your family's health needs, age and budget. Also, consider family size and medical histories when deciding.
Can I change the family floater to individual?
Yes, you can typically change from a family floater to individual policies. This is usually done at policy renewal time. Contact your insurer to discuss the process. Be aware that premiums may change for certain coverages.
What are the disadvantages of a family floater mediclaim policy?
Family floater policies have a shared sum insured, which may be inadequate if multiple family members need extensive treatment simultaneously.
Premiums increase with the oldest member's age, potentially making it costly for younger family members. Coverage may not be tailored to individual needs, especially for family members with specific health concerns.
If this is the case, you can buy individual plans for family members with specialised health concerns and a floater policy for the rest of your family members to ensure proper healthcare coverage.
Disclaimer / TnC
Your policy is subjected to terms and conditions & inclusions and exclusions mentioned in your policy wording. Please go through the documents carefully.