Should You Include Your Parents In Your Family Floater Plan?

Posted on: Jul 16, 2024 | 3 mins | Written by: HDFC ERGO Team

Should You Include Your Parents In Your Family Floater Plan?

We have seen our parents work hard, and we want to ensure that they have a comfortable life after retirement. But their health status keeps us worried because of their weakening immunity. With age, they become more vulnerable to several ailments. Buying a health insurance policy with adequate coverage is the best way to ensure they have access to high-quality medical facilities during hospitalisation. But picking the right health plan for them at a reasonable price can be a hard nut to crack. Many people consider adding them to the family floater health plan an easy solution. But is it a good choice? Let’s figure out.

What is a Family Floater Plan?

Family floater health insurance is a type of healthcare plan that covers multiple members under one policy. It has a single sum insured shared among all the insured members. The premium is also single and is calculated based on the age of the eldest family member. Most family floaters allow you to add only immediate members, such as your spouse and children, while some may also allow you to add dependent parents, in-laws, or siblings.

Family floaters are ideal for couples, nuclear families, and younger families where the family members are healthy with no major health conditions. These plans are also economical compared to buying individual health plans for each family member.

Should you include parents in your family floater?

Including parents in the family floater plan is not advisable for several reasons, the primary one being cost. The premium of a family health plan is calculated based on the age of the eldest family member. The higher the age, the higher will be the premium. So, it’s best to buy a separate policy for parents.

Why Should Parents Have a Separate Healthcare Policy?

Here are some reasons why you should buy a separate policy for parents and not include them in the family floater —

1. High Premium:

Since the cost of family health plans is based on the age of the eldest family member, it can be heavy on your pocket. Apart from age, if your parents have any co-morbidities or pre-existing ailments like diabetes or hypertension, the probability of filing claims is higher. Hence, insurance providers charge high premiums for a family floater with parents to mitigate the risk.

2. Impact on No-Claim Bonus:

You are eligible for a No-Claim Bonus (NCB) when you don’t raise any claims during a policy year, which can accumulate over the years. With NCB, you can get a discount on your premium during renewal; this can be a maximum 50% discount for five consecutive claim-free years or an increase in the sum insured at no extra cost. In a family floater policy, any claim by any member will affect the NCB. Now, if you add parents to the family floater, they may require frequent medical attention due to their age, and there is an increased likelihood of making claims. As a result, you may lose the accumulated NCB. If parents have a separate policy, the NCB of only that policy will be affected.

3. Coverage may be insufficient:

The sum insured in family floaters gets shared by all members. Given their age and health conditions, if the sum insured gets exhausted on their treatments, the other members will have no financial protection during the policy tenure. In case of another emergency, you will have to pay the medical expenses by yourself; the high healthcare costs can dent your savings.

The Way Forward

Buying them separate policies is the best way to ensure your parents have comprehensive medical coverage. They will have an adequate sum insured and coverage for their specific medical needs. If they are above the age of 60, senior citizen health insurance is the ideal option, as these plans are specially designed for them. The premium may be slightly higher but will not deplete their life-long savings during medical emergencies or planned hospitalisations. If you have a family history of critical illness like cancer, stroke, paralysis, or kidney ailments, you can consider buying critical illness insurance for them for additional protection. Critical illness policies provide lump sum compensation on being diagnosed with any of the covered critical illnesses, irrespective of the medical costs incurred.

Conclusion

While purchasing a health insurance policy for your parents, check the coverage, benefits, sub-limits, deductibles, waiting period for pre-existing diseases, and other terms and conditions. Look for a plan with a high sum insured and lifetime renewability for uninterrupted coverage and peace of mind during their golden years.

Disclaimer: The above information is for illustrative purposes only. For more details, please refer to the policy wordings and prospectus before concluding the sales.

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