6 Benefits of Family Health Insurance: Maximising Health and Savings

In a family with two children, when one child falls ill, both parents must are required to be present to care for the child and manage household responsibilities. Similarly, if one of the parents becomes unwell, the other parent has to shoulder extra duties to keep the household running smoothly.

This also entails hidden costs, adding to the stress associated with healthcare. Therefore, prioritising health is crucial for all family members, emphasising the importance of a family health insurance plan as an indispensable financial tool.

This article explains what a Family Health Insurance Plan is and its importance by enumerating the benefits of buying a family health insurance plan.

What is a Family Health Insurance Plan?

Health insurance is a form of insurance designed to offer protection in the event of medical emergencies resulting from injuries, illnesses, or accidents. This insurance encompasses various medical costs, including hospital bills, medications, and consultation fees, among others.

A health insurance policy can be acquired for a designated duration by paying premiums on a monthly or annual basis. The primary determinants affecting health insurance premiums are the age of the policyholder, the insured sum, and the individual's health-related habits.

Family Floater Health Insurance is a specialised insurance scheme designed to encompass an entire family within a single policy. This unified policy involves a sole premium payment that extends coverage to multiple family members. The protection offered by this policy is shared among all the individuals covered, making it applicable for use by either a single person or multiple individuals within the same policy year. The family floater plan is particularly well-suited for small families consisting of two adults and 0-3 children.

[Also Read: Top 12 Tips to Make the Most Out of Your Health Insurance Plan]

[Also Read: A Comprehensive Guide to Buy a Health Insurance Policy in India]

Importance of a Family Health Insurance Plan:

Buying a family floater health insurance plan is of paramount importance for several compelling reasons. A family floater plan serves as a financial safety net, preventing you from depleting your savings or facing significant financial strain when medical needs arise. It provides peace of mind knowing that your loved ones' health is secure, and you won't have to make difficult decisions between their well-being and your financial stability.

What's even more advantageous is the flexibility of these plans to include additional family members, like elderly parents, should the need arise. This makes family floater health insurance a comprehensive solution that adapts to your evolving family dynamics and healthcare requirements.

It is indeed a smart and cost-effective choice that prioritises the health and financial security of your entire family. Let's see the benefits of family floater health insurance plans in detail for better understanding.

What are the benefits of buying a Family Health Insurance Plan?

1. Comprehensive Coverage with Convenience:

Opting for a family floater health insurance plan simplifies the management of your insurance. With just one annual premium to track, you can ensure coverage for your entire family without the hassle of renewing it annually.

Some of the finest family health insurance plans offer the flexibility to include your parents and parents-in-law within the policy at no extra cost. Furthermore, if you have recently welcomed a new addition to your family, you can easily incorporate your newborn into your existing plan rather than acquiring a separate one.

This ensures that all your family members, regardless of age, can access top-quality healthcare services through a single policy.

Additionally, you can explore the option of a long-term health insurance policy, spanning 2-3 years, to eliminate the need for yearly renewals.

2. Cost-effectiveness:

Since all your family members are covered under a single policy, family floater health insurance proves to be more affordable. The premium is significantly lower compared to buying separate individual plans for each family member. This approach allows you to efficiently cover all your family members without stretching your budget.

Moreover, the option to purchase health insurance online provides the opportunity to access further discounts on your premium payments.

3. Adequate Sum Insured:

Family floater health insurance policies often commence with a higher sum insured. Since the likelihood of all family members falling ill in a single policy year is relatively low, individuals typically opt for a more substantial sum insured under the family floater plan. This ensures that the sum insured is sufficient to cater to the health needs of all the insured members.

Furthermore, some insurers now offer a feature that provides a separate sum insured for each member. For example, with a traditional family floater plan with a sum insured of Rs 10 lakh covering your spouse, child/children, and yourself, if you've utilised Rs 8 lakhs in the third month, and your spouse needs coverage of Rs 5 Lakhs in the seventh month, he/she would only receive the remaining Rs 2 lakh.

However, the feature of a separate sum insured for each member allows your spouse to benefit from the policy and receive a separate cover of Rs 10 lakh, which wouldn't be possible with a standard family floater health insurance plan.

4. Seamless Hospitalisation Experience:

Hospitalisations can be distressing in themselves without the added burden of paperwork and intricate fee payment procedures. With a family health insurance policy, you can effortlessly access cashless treatment at network hospitals.

Your insurance provider takes charge of the hospitalisation expenses, ensuring that you and your family can focus on stress-free treatment and recovery. Family medical insurance proves to be an excellent means of guaranteeing that all family members receive consistent and high-quality healthcare services during hospital stays.

5. Tax Benefits:

Another advantage of health insurance is the potential for tax benefits, as it qualifies for deductions under Section 80D of the Income Tax Act.

The premium payments associated with your family health insurance plan make you eligible for health insurance tax benefits under Section 80D of the Income Tax Act. This transforms family medical insurance into an economic asset, making its acquisition a shrewd financial decision.

Within this section, you can claim deductions of up to Rs 25,000, with the possibility of an additional Rs 25,000 deduction if your parents (under 60 years of age) are included in the plan. For parents over the age of 60, the supplementary deduction increases to Rs 50,000 per financial year.

Furthermore, if both parents are over 60 years old, the maximum additional deductions available under this section rise to Rs 1 lakh per year.

6. Additional Benefits:

Beyond their fundamental coverage, family health insurance plans come with supplementary riders and add-ons, such as wellness programs incorporated into their policies. These may include critical illness coverage, accidental death benefit, maternity coverage, and more.

The wellness initiatives included in these plans enable family members to accumulate wellness rewards or points, which can be utilised to cover expenses related to healthcare services such as medication, outpatient consultations, health supplements, and health check-ups.

To conclude:

In the realm of financial planning, having a Family Floater Health Insurance Plan emerges as a cornerstone of security. It plays an integral role in helping families navigate the complex landscape of medical expenses.

Undoubtedly, in today's post-pandemic world, health insurance stands as a non-negotiable investment for every household. With the right insurance policy, you can breathe easy, knowing that you and your loved ones are shielded from the financial burden of medical bills.

To fully leverage this vital protection, it is important to invest time to comprehend your chosen plan thoroughly, familiarise yourself with all its features, and consider all the critical points you need to know before buying a health insurance policy. By doing so, you can confidently select the right policy that provides comprehensive protection for you and your family.

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KETKI JADHAV is a Content Writer at PersonalFN since August 2021. She is an MBA (Finance) and has over seven years of experience in Retail Banking. Ketki specialises in covering articles around banking, insurance, personal finance, and mutual funds and has been doing it for over three years now.

Disclaimer: Investment in securities market are subject to market risks, read all the related documents carefully before investing.
This article is for information purposes only and is not meant to influence your investment decisions. It should not be treated as a mutual fund recommendation or advice to make an investment decision in the above-mentioned schemes.