Family Health Plan: A Guide Book for the Layman

The family is the most important thing in your life. Without them, you may feel lost and have no purpose in life. That’s why you strive day and night to keep your family safe and happy. But, have you ever thought of securing their health? Sicknesses and diseases can strike any of your loved ones. Medical ailments can not only leave you emotionally and physically stressed, but also stretch your finances. A family health plan could be your saviour and help you meet the cost of unexpected medical contingencies.

Here is your complete layman guide to all you need to know about family health plan.

Understanding Family Health Insurance

Also known as a family floater plan, family health insurance covers all members of a family under a single policy. You do not have to take individual insurance for each member. Usually, it covers:

  • You
  • Your spouse
  • Your kids (up to 4 dependent children)
  • Your parents (irrespective of dependent or not)

Some insurance plans may also allow insurance for siblings, in-laws or extended relatives.

The sum insured of a family health insurance plan can be used by any member of the family for any number of times till the limit is exhausted or before the validity expires. Usually, the validity of any health plan is for one year, post which it has to be renewed every year. Let’s take an example to understand.

You have purchased a family health plan for Rs10 lakhs sum assured covering yourself, your spouse, one child and parents. This is the upper cap health insurance limit available to your family. If you claim Rs3 lakhs for one of the family members, then only Rs7 lakhs will remain for utilization for medical emergencies during the policy duration. The amount of 7 lakhs can be claimed for the same as well as other family members. If no claim is made during the year, the policy will expire.

Benefits of Family Health Insurance

  • Protection of entire family’s health under one plan.
  • No hassles about maintaining separate or multiple health policies.
  • The premium on family floater plan is cheaper than what you would cumulative on individual plans for all family members. A family policy is lighter on your pocket.
  • Tax benefits – the premium paid on family health insurance plan are eligible for deduction under section 80D of the Income Tax Act of India. This deduction is over and above the popular 80C investments such as fixed deposits, Public Provident Fund, home loan, life insurance, etc. The amount of premium you can claim as tax benefit varies according to the age and relation of the family member. Refer the following chart for details.

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Expenses Covered Under Family Health Insurance

While the features of medical insurance differ from one plan and insurance company to another, they typically cover the following expenses:

  • Pre and post hospitalization
  • All day-care procedure
  • Domiciliary (home care) treatment
  • Room rent
  • Daily allowance
  • Ambulance
  • Health checkups

Choosing the Right Family Health Insurance

It is advisable to compare various health plans across different insurance companies. A good plan is one which covers a maximum number of medical conditions, diseases, critical illnesses and surgeries; offers maternity and dental benefits; compensates for alternative treatment therapies; and meets most medical expenses.

Here are some factors you should bear in mind:

  • Understand Your Requirements: Each family has unique health requirements. If you need insurance only for you and spouse, you can opt for lower sum insured. If the insured people include kids and parents, then higher sum insured is required. Similarly, older the parents, more the health risks and so higher the cover amount should be. If a family member has a serious ailment or carries a higher health risk owing to their occupation, age or any genetic condition, it is advisable to purchase a separate health cover instead of including him or her in a family health plan.
  • Premium: While the premium on family floater plan is lower than an individual plan, the amount is usually determined on the age of the eldest member of the family. So, if there are any senior citizens, especially above the age of 60 years, you should not include them in the family plan. It is also advisable not to fall into the temptation of buying a health plan with the lowest premium. If you are getting more benefits by paying extra, go for that plan.
  • Clauses and Exclusions: Check for all those points which are not covered under the policy or limit the benefits. For instance, most health plans do not cover dependent children as soon as they reach the age specified in the policy document. Or, new members can be added only at an extra premium. Some plans have a co-pay clause meaning that policyholder will bear a part of medical expenses. There is also a sub-limit clause under which you can claim only up to a certain percentage of room rent or for certain treatments. Some policies cover existing diseases while others make the policyholder wait for few years for the claim.
  • Cashless Hospitalization: Most insurance companies have a network of hospitals to provide cashless claims to the policyholder. This facility ensures that the hospital settles the medical bills directly with the insurance company without requiring your intervention. At the time of buying the policy, check if the hospitals in your areas are included in the list.
  • Claim Settlement: What’s the use of a health policy if you can’t get reimbursement? Select the insurance company which has a high claim settlement ratio, good reputation and a hassle-free claim process.

A family health plan should be your priority if you have dependents in your family. At least, it will ease off your financial worries about their health.

Author: Oliver Curtis

Hi there. I’m Oliver. I’m just a young boy from the outskirts of… Okay, that’s a lie, I’m not a young boy anymore, although I certainly feel that way at heart.

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