How to reduce health insurance policy premium

K. ARAVIND

Family floater policies are unique in that they cover all members of the family under one policy, rather than taking out individual health insurance policies. For example, if there are three members in a family, instead of taking special policies with a coverage of Rs.1 lakh per person, you can take a family floater policy with floating coverage of up to Rs.3 lakh for three persons.

The advantage of taking out a Family Floater policy that covers the whole family together is that the cost of the premium item is reduced. The Family Floater policy comes with a lower premium than the one you have to pay for a particular policy. Doing so can save up to 30% of the premium.

Let us see how the Family Floater policy works. For example, a family with a family floater policy of Rs.3 lakh can get floating coverage of up to Rs.3 lakhs. Suppose the head of the family is admitted to the hospital and the hospital expenses are Rs.2.5 lakhs. The entire cost can be claimed under the Family Floater Policy. At the same time, if individual policies are taken out with a coverage of Rs.1 lakh per person in the family, the head of the family will get a maximum claim of only Rs.1 lakh.

However, family floater policies have some drawbacks. Family floater policies are renewed based on the age of the senior member of the family. Most family floater policies cannot be renewed after the age of 60 for a senior member of the family. This means that when a senior member of the family turns 60, he or she will have to take out a special policy for senior citizens and individual policies for other members.

When taking out new policies, one has to wait for 3-4 years to get coverage for existing diseases. No claim bonus will also be forfeited on non-claim basis.

Statistics show that the demand for family floater policies is on the rise as the cost of health insurance continues to rise. This trend is reflected in the figures of those health insurance sales. The sale of family floater policies is more profitable for the insurance companies as it is very rare for a claim to be made for the entire sum insured.

Care should be taken to ensure adequate coverage when taking out a health insurance policy. The coverage amount needs to be increased adequately in the event of a surge in hospital accommodation and medical expenses.