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Health Insurance February 11, 2021
A health emergency as and when it comes can unsettle your finances. One of the best methods to minimize this is to go for a health insurance plan. But one of the questions that you are most likely to ask is whether you should go for an individual option or floater option in a health insurance plan. To know the answer to this question, you would need to know the difference between an individual option and a floater option in a health insurance policy.
In this article, we will be discussing all those factors that differentiate these two options so that you can decide the better alternative for you. But first, it is important to understand what exactly is an individual option and a floater option in health insurance plans. So, without any further delay, let’s get to it!
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As the name suggests, the individual option provides benefits only to a single individual which means your family will not receive any coverage under a single plan. In this option, the premium amount will depend on the individual’s age and the sum insured.
On the other hand, in the case of a floater option, an individual can get coverage for more than one member in his or her family, such as a spouse, dependent children, parents, etc. However, it will depend on your choice as to whom you want to include. Here, the overall sum insured will float equally among all the covered members of the family. This means the sum insured amount can be availed by any member of the family during a policy year.
So, now that you have a basic understanding of individual and floater options, we will move to the next section where you can understand the factors that differentiate these two options.
There are some factors based on which you can draw the difference between an individual option and a floater option in health insurance. These factors are premium amount, the flexibility of sum insured, eligible members, no claim bonus facility, etc. We are explaining them one after another. Have a look!
One of the major differences between individual and floater options in a health insurance plan is the premium amount that you will pay towards the policy. In the case of an individual option, the premium amount will depend on the individual’s age and the sum insured option chosen. Whereas for the floater option, the premium amount will depend on the age of the oldest member in the family and the coverage amount.
So, the floater option in a health insurance policy can prove to be a cheaper alternative if you are a young couple or a family including young children as compared to the individual option. However, if an individual wants to add his or her parent as a member in a floater option, it can be slightly costlier because of the age gap between the oldest member under the policy and other members in it.
In the case of the individual option, the sum insured will be fixed for the member. For example, if an individual has chosen a plan with a sum insured of INR 20 lakh, the entire amount will be available to him or her for the entire policy period. On the other hand, in the floater option, the sum insured will float among all the members of your family which means the sum insured will not be fixed for each member.
Suppose the sum insured is INR 20 lakh under the floater option for 4 members. This does not mean each member will get a fixed coverage of INR 5 lakh. Instead, the overall amount can be used by any of the family members. Let’s say a member has used INR 4 lakh in a policy year, the remaining sum insured that other members can get will be reduced to INR 16 lakh in that policy year.
Eligibility of the members is also considered to be one of the major differences between individual option and floater option. Under the individual option, a policyholder can choose to add his or her spouse, children as well as parents, or any other family members.
On the other hand, in the case of the floater option, a policyholder can include more members compared to the individual option such as his or her spouse, dependent children or parents, etc. Also, you need to remember that different policies have specific ages (ranging from 18 to 25 years) when the dependent children will be treated as an adult, and they will need to be removed from the plan after which you can choose a separate health insurance plan for them. However, there isn’t any restriction on the age of dependent parents under the floater option.
Health insurance companies provide a no claim bonus (NCB) to their policyholders by either increasing their overall coverage or decreasing their premium amount when they don’t claim in a policy year. You can get this benefit on both an individual and floater basis.. But here’s something you should know. In the case of a floater option, the no claim bonus won’t be available that year if any of the members in your family have claimed under a policy year.
On the other hand, there won’t be anything like this in the case of the individual option. An individual can enjoy the NCB benefit for the succeeding policy year if he/she doesn’t claim during the current policy year.
So, these are the differences that you should always keep in mind when choosing between individual option and floater option in a health insurance plan. After understanding them in detail, you could choose the better alternative based on your needs.
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