Is family floater health insurance cheaper than individual covers?

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Family floater health insurance is marketed as a smart way to cover everyone under one policy. Instead of buying separate individual policies for each member, you pool the cover so that the entire family shares one sum insured. For example, a ₹10 lakh floater policy might cover two adults and two kids. At first glance, the premium is lower than buying four individual ₹10 lakh policies. That’s why many households assume floaters are always cheaper.

The cost advantage is simple: insurers know that not every family member will fall sick at the same time, so they’re willing to let the group share a single pool of funds. This spreads the risk and usually results in lower total premiums. For younger families with children and relatively healthy parents, a floater can save you several thousand rupees a year compared to multiple individual covers.

The flipside is that the sum insured gets shared. If one family member ends up with a major hospitalisation—say, due to surgery that costs ₹8 lakh—there’s very little left for the rest of the year. In an individual plan, each member gets their own full cover. Another catch is age: in floaters, the premium is based on the oldest member. So if your parents are included, the cost of the floater can shoot up dramatically, wiping out the “cheap” advantage.

A floater works best for nuclear families with younger members who are unlikely to face multiple expensive hospitalisations in the same year. It’s a good starting point for couples in their 20s or 30s, especially if the sum insured is high enough. A ₹15-20 lakh floater policy can be more cost-effective than four separate ₹5 lakh individual covers, while still giving reasonable protection.

If your family includes older parents or members with existing health conditions, separate individual covers are safer. That way, one person’s large claim doesn’t eat into everyone else’s protection. It also makes sense to buy an individual policy for parents while keeping a floater for younger members. This mix ensures affordability without compromising coverage.

FAQs

Not always. They are cheaper in premium terms for young families, but once you include older parents, premiums rise sharply.

Yes. Many families keep a floater for the couple and kids, and separate policies for parents.

In metros, at least ₹15-20 lakh is advisable to account for rising medical costs, especially if more than three people are covered.