Updated On May 15, 2024

By SaraNextGen

Why Large Family Floater Health Plans are always Better than Individual Top-Up Plans

While buying a health insurance policy, most individuals wonder if they should include an individual top-up plan or a family floater health plan. After all, these are the two popular health insurance plans that most insurers in India.

• Some buyers prefer to go with an individual top-up plan, whereas others stick with a family-floater health plan. However, the latter has an edge over the former in many ways. 

• Want to know how? Read on to learn more about it in detail.

• Why does investing in a family floater health plan constitute a better investment option than an individual top-up plan?

• An individual top-up plan only covers the health and hospitalization needs of a specific individual. On the other hand, a large family floater health plan meets the requirements of an entire family. 

• No doubt, an individual top-up plan seems good on paper as it is less expensive. However, it may not be a feasible option if you have a large family. In such a case, you would need to invest in a separate plan for each member, which may put your finances under strain.

• You would be better off investing in a single plan that covers the needs of all the members of your family. A family floater health plan packs this benefit in a single package.

• A single individual may not use up the entire sum insured. However, this situation may not arise if it is shared among the members of a large family. This will become clear if you consider the example below.

• If you buy an individual top-up plan worth 10 Lakhs, then you will need to use up the whole benefit on your own. If the sum insured is for four members of a family, then there can be two possibilities. Either one of the family members can use the whole sum insured or share it among the family members.

• But that’s not all; it also benefits you in several other ways compared to an individual health top-up plan.

• A family floater health plan comes with a higher sum insured in comparison to an individual health plan. This is because the former is meant for more beneficiaries than the latter.

• A health insurance plan revolves around the needs of many members of a family. As such, it comes at a lower premium than the sum total of several individual top-up plans.

• Final thoughts

• Both individual top-up health insurance and family floater health insurance plans are beneficial in different ways. The latter turns out to be more favorable if you have a large family with several members. Any member of a family can either use the entire sum insured or share it with other beneficiaries. As such, it serves the needs of everyone in a family without making it necessary to subscribe to individual plans for all members.

• Health insurance companies in India are aware of this requirement. So, they roll out family floater plans for the benefit of their clients.