How are Premiums Different for Floaters vs Individual Health Insurance?

According to the Hindustan Times, India is witnessing a growing preference for family floater plans among millennials, born between 1981 and 1996. It is due to the rising healthcare costs and increasing awareness of medical insurance plans.

However, there is a significant difference in premiums and benefits between floater and individual plans. Continue reading to learn more.

What is the Difference in Premiums for Floater vs Individual Health Insurance?

The premium amount for individual health policies is calculated considering the age of the insured person and the total coverage chosen.

On the contrary, an insurer determines the premium amount for a family floater health insurance policy by considering the age of the eldest family member, the size of the family (3 or 4 members) and the location where the family resides.

● Example 1: Individual Health Insurance Premium

Suppose Rahul (age 32) buys an individual health insurance plan with a sum insured of ₹5 lakh. As he is young and not diagnosed with any severe medical condition, his annual premium may be around ₹6,000 to ₹8,000.

Now, his father (age 58) buys a separate individual plan with the same sum insured. His premium can go up to ₹15,000 to ₹20,000 due to his higher age and being diagnosed with cardiac issues.

● Example 2: Floater Health Insurance Premium

Imagine a family of 3 members: Rahul (35), his spouse (28), and his baby (5). They chose a family floater plan of ₹5 lakh. And they do not have any pre-existing health issues.

In this case, the insurer calculates the premium based on the eldest member's age (35) and family size. As a result, the total premium may be around ₹13,000 to ₹15,000 for the entire family.

How are Benefits Different for Floater vs Individual Health Insurance?

To understand the difference in advantages, let's refer to those previous examples:

● Example 1: Individual Health Insurance

In this case, Rahul can avail personalised coverage, which means he can customise the plan to address his unique health needs. Besides, he can utilise the entire ₹5 lakh for his treatment if he faces any medical issue.

● Example 2: Floater Health Insurance

In floater plans, Rahul has to share the total sum insured with his spouse and baby. If one member requires treatment, the entire ₹5 lakh can be utilised. Or if one hospitalisation requires ₹2 lakh, the remaining ₹3 lakh can be used for the treatment of other family members.

Final Word

Choosing between floater and individual health insurance should involve more than just comparing premiums. It is important to consider factors such as family size, the age of the eldest member, and the specific healthcare needs of each insured person.

While individual plans offer personalised coverage with a dedicated sum insured for each policyholder, you must note that floater plans provide cost-effective protection for the entire family under a single premium.