Advantages and Disadvantages of Getting a Family Health Insurance Plan in India

An individual health insurance plan offers coverage only for a single individual. On the other hand, a family health insurance plan secures your entire family. Experts suggest that one should have a family health insurance plan with a minimum of Rs 5 lakh to Rs 10 lakh sum insured. Also, given that the medical costs are on the rise, the more the sum insured, the better.

Healthcare costs have risen all over the world, especially over the last decade. The expenses have increased across all age groups. Couples are seeing a sudden rise in costs for delivery. If you include a child in a family floater plan of health insurance in India, the sum insured and premium increases.

The math

Experts suggest that you opt for health insurance in India that includes maternity cover, more importantly for recently-married couples. Because, in a metro, normal delivery at a good hospital can cost anywhere from Rs 65,000 to Rs 1.4 lakh. This cost is apart from the usual check-up expenses of the mother. Most health insurance policies do cover maternity costs. A few family health insurance plans that include maternity expense in their cover, cover it after a particular waiting period is over. The waiting period ranges between 2 and 4 years.

Additionally, the premium increases with the inclusion of a child in a health insurance policy. The sum insured of the health insurance policy also rises. As per experts, you should have a sum insured of Rs 5 lakhs to 10 lakh in a family floater plan, given the rise in medical costs.

Below are some of the advantages and disadvantages of family health insurance plans in India:

Advantages of having family health insurance plans

• Under a

family health insurance plan, you can easily add a family member like a new-born or spouse. It varies from company to company.

• Suppose one of the family members included in a family health insurance policy gets sick and needs hospitalisation. In that case, the total sum insured of the plan can be utilised for the treatment of that member.
• In a family health insurance plan, all members of a family can be included in one policy. This is easier to manage than to have and manage separate individual policies. Hence, as a policyholder, you can take care of your entire family with one policy.
• Family health insurance plans are an excellent option for getting insurance for parents. This is because opting for a different health plan for senior citizen is costly. Also, note that the premium for the insurance cover will get relatively high when senior citizens are included. This is because the elderly’s are more prone to disease.
• Under section 80D of the Income Tax Act, family health insurance plans have income tax benefits.

Disadvantages of having family health insurance plans

• Let us take an example: your family is covered under a family floater plan. Now, one of your family members gets sick and gets treatment at a hospital. As that family member is included in the policy, he/she is eligible and can use up the total sum insured of the policy for hospitalisation costs. In such a case, the rest of your family members will be left uncovered for that year.
• Many family health insurance plans provide coverage only for your immediate family members, like your spouse or children. It may not include your father, in-laws, and siblings.
• When more than one claim is made within a year, the family member that is taking the second claim gets a reduced cover. Thus, other family members are left with a thinned out cover after the first claim made in the insurance policy.
• The renewability of a family health insurance policy is one of its major drawbacks when senior citizens are included in the plan. A family health insurance can be renewed only until the oldest member in the policy reaches his/her maximum renewability age. However, with the intervention of IRDA, some insurers have started providing lifelong renewability in their family health insurance plans.

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