Family Floater Insurance Terminology Simplified: Read Before You Buy
Family floater insurance policy insures the entire family, subject to the conditions of the plan. There are a few key terms in a family floater insurance policy that you should know and understand when planning your purchase.
These terms outline how the coverage works, who it covers, and the distribution of the sum insured among family members. Thus, understanding them is essential to help you get the coverage you need at an affordable cost.
Introduction to Family Floater Insurance
A family floater health insurance policy differs from individual health insurance, where each family member requires a separate plan in their own name. A family policy is issued in the name of the primary insured, who may then choose to cover the spouse, children, and sometimes even in-laws, as per the policy's terms.
The policy premium depends on the age of the oldest family member and the sum insured. With this model of shared coverage, you benefit from flexibility and lower costs as you eliminate the need to pay multiple premiums.
Family Floater Insurance Glossary
These key terms in family floater insurance define how the policy works, who it covers, and how the insurer handles claims.
In a family floater health insurance plan, the sum insured refers to the total coverage amount. This amount is available under a single policy for all members. Unlike individual health plans, a floater policy allows the entire insured amount to be shared among the family individuals. It means any member can use the sum insured as needed, depending on who requires medical attention.
However, the sum is not fixed per person. If one family member utilises a portion of the total coverage for treatment, the remaining balance is what the rest of the members can use. For instance:
Co-payment is among the important insurance terms for young families. It refers to a clause where the insured has to pay a fixed portion of the total claim amount. This means that in the event of a medical claim, you or your family members must bear a percentage of the treatment cost. In this, the insurer pays the remaining amount. The co-payment clause is commonly included in policies covering senior citizens or treatments at non-network hospitals.
On the other hand, sub-limits refer to the predefined caps on certain medical expenses within the policy. It is applicable even if the total sum insured is higher. These restrictions apply to specific components like room rent, doctor’s fees, or particular treatments. For instance, a policy may cap room rent coverage at ₹3,000 per day, irrespective of the total sum insured.
While co-payment can reduce the premium cost of the policy, it also increases the financial burden. You can save on premiums, but you need to pay funds from your pocket when you file a claim. Understanding co-payments and sub-limits helps you save on premiums.
The waiting period refers to a fixed duration during which certain health conditions and treatments are not covered, even though the policy is active. This waiting period applies to pre-existing diseases, maternity benefits, and specific treatments.
Similar to individual health plans, family floater policies also enforce these time-bound restrictions. The duration of waiting periods can vary across insurers, usually ranging from 1 to 4 years. It is crucial for you to thoroughly understand the waiting period clauses before purchasing a plan.
Claims made during the waiting period are usually not admissible. As family floater plans cover multiple members, being aware of waiting periods helps in financial planning.
Why Knowing Insurance Terms Matters
Understanding family floater insurance terminology in a simplified way helps you make informed decisions. It also avoids issues during claim processing and ensures optimal financial protection. Here are the key reasons why it matters:
Frequently Asked Questions
1. What is the meaning of sum insured in family floater insurance?
In a family floater health insurance plan, the sum insured refers to the total amount of coverage available. This amount is available under a single policy for all members.
2. How does co-payment affect my insurance claims?
It refers to a clause where the insured has to pay a fixed portion of the total claim amount. This means that in the event of a medical claim, you or your family members must bear a percentage of the treatment cost. This can directly affect your finances as you are liable to pay a sum from your pocket during medical emergencies.
3. What should I know about the waiting period in health insurance policies?
The waiting period refers to a fixed duration during which certain health conditions and treatments are not covered, even though the policy is active. The duration of waiting periods can vary across lenders, usually ranging from 1-4 years.