What Is The Difference Between Individual Option And Floater Option in Health Insurance?

Most health insurances offer two kinds of coverage options such as an Individual option and a Family Floater option. Both of these options are designed to reimburse your medical expenses by paying you the sum insured or the maximum amount of claim assured by the insurance company under a particular policy.

Sometimes it becomes difficult to choose between the two options. There are certain differences between them in terms of eligible members, insurance coverage and premium payment. Let’s first understand what each of these options are and then look at the difference between the two -

Individual Option Vs Floater Option

• Individual Option - As the name suggests, this option provides health coverage to only one individual. The benefits of health insurance can be enjoyed only by the policyholder. If you want to insure all of your family members, you will have to purchase separate policies for each of them and they will have a particular sum of money assured to them under the policy.
• Family Floater Option - A family floater is a health insurance plan that extends the coverage to your spouse and children under one insurance policy. It acts as an umbrella plan whose benefits can be availed by all the family members, unlike just one individual. It is a suitable option for families with young individuals who are less likely to be affected by health risks.

Difference between the Individual Option and Family Floater Option

• Eligible Members - Under the Individual option, a person may include their spouses, parents and children provided that each of the policies are bought independently for each of the members.

Under the Floater option, a person can include their family members such as spouses, children and parents under a comprehensive family health insurance plan, subject to the payment of a higher premium.

• Insurance Cover - The Individual option offers coverage to a single individual and separate coverage for each of the persons for whom it has been bought. The sum insured remains fixed in an individual option and is the same for each policyholder.

Example - If you have a sum insured of INR 2 Lakh and one member incurs a medical expense of INR 4 Lakh, then the insurance company will only pay the sum insured of INR 2 Lakh. The remaining money has to be paid by you. No other person other than the one who holds the health insurance will be able to claim the sum insured during such an instance.

Under the family floater option you have the surety of the entire sum insured for all the members under the same policy. In this option, the sum insured is not predefined or fixed for anyone and the claim made by one family member can reduce the claim of the rest by the same amount.

Example - If you have a total health insurance coverage of INR 15 Lakh for your familyand you have incurred medical charges of INR 5 Lakh, this entire amount will be covered by your health insurance under the family floater option. However, the amount of money that your spouse, children and parents can claim during that policy year will be reduced and limited to INR 5 Lakh only.

• Amount of Premium - The amount of premium payment under the Individual option is dependent on the age of the policyholder. If the policyholder is an ailing adult, then the amount of premium is reduced as it is calculated on the age of the eldest adult.

In the case of the Family Floater option, the amount of premium to be paid is much less than the former since it is calculated on the age of the eldest adult. The premiums are much cheaper and affordable for young families.

Since Floater options offer low cost coverage in contrast to multiple individual plans, this option is the best one for you if you have a small family without any major medical history and the age gap between you and your spouse is not much. However, if any one member in your family has a history of critical illnesses, then the Individual option will provide a valuable health cover in the coming days.

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.