Ensure health insurance plans for extended family

In Insurance

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Many individuals are preparing for a life without a comprehensive health insurance cover for their family as insurance companies are busy imposing caps, sub-limits, co-payment clause, among other things, on corporate group health insurance schemes to cut the mounting losses on these plans.
Needless to say, it puts some members of the family, especially elderly parents, at grave risk. They can salvage the situation in two ways.

First, by going for an individual health insurance cover for every member of the family. If money is an issue, they have another option of getting a family floater plan that will cover the entire family.
However, most family floaters restrict the coverage to two adults and two children, which means the elderly parents are likely to be left out again. Grim scenario, right? Not necessarily. You now have a third option of buying a health insurance plan that will cover not only your parents, but also in-laws, siblings and even cousins.
“During customer research, we found out that customers are more concerned about the health of their family members than their own. Also, the joint family system is still quite prevalent in India,” says Neeraj Basur, CFO of Max Bupa.

“Our research showed that there was a significant lack of coverage for dependant parents and in-laws, given that group covers rarely insure dependants. We saw this as an opportunity to provide individual covers that could be gifted to an extended family,” adds Harshal Shah, director, marketing, Aegon Religare Life.
No wonder, the recently-launched online defined benefit health plan from Aegon Religare Life has brought parents, in-laws and siblings under the coverage ambit. Similarly, Oriental General Insurance’s family floater allows the holder to include either parents or parents-in-law in the plan. Max Bupa has been promoting its product with cover for multiple relations as its USP. Oriental General Insurance’s family floater allows the holder to include either parents or parents-in-law in the plan.

Max Bupa has been promoting its product with cover for multiple relations as its USP. “These covers look to tap the Indian joint family system where the decision-making is centralised with the head of the family taking a call on behalf of all family members,” says Mahavir Chopra, head, e-business with insurance portal medimanage.com.
“Newer entrants and standalone health insurers have to bank on innovation to differentiate themselves from the existing general insurers. Such policies serve as a means of achieving this objective,” adds Juzer Jawadwala, executive director, Nandi Insurance Broking.
Then, there are companies that have introduced family floaters to address the issue of inadequate sum insured under a single policy.

How do they work?

While the one of chief aims is to get around the challenge of sum insured getting exhausted in a year – particularly, if senior citizens or those with adverse health history are covered under the plan – there are variations in the solutions offered.
Apollo Munich and Star Health offer the sum insured restoration feature, where the cover is replenished in a year if the subsequent claim is made by another family member or for an ailment unrelated to the earlier claim.
L&T Insurance reinstates the cover to pay for accident-related claims, while Max Bupa’s product offers a combination of individual and floater limits. Aegon Religare’s policy makes the cover amount available to all policyholders.

“Under our plan, if a family of four buys a policy with a sum assured of 5 lakh, the sum assured will be available to each of the members. That is, the total coverage for the family will amount to 20 lakh annually. While the premium could be higher relative to regular family floaters, yet it will be cheaper than covering each member separately,” says Rajesh Rajput, director, corporate actuarial, Aegon Religare Life.

Do they make sense?

“If your employer has decided to leave out your parents from the group cover, you have two options – either buy individual covers for your parents or opt for a family floater policy that will cover them. The latter holds the edge over individual policies in terms of cost effectiveness,” says Jawadwala. Now, if your family is in the pink of health, you have a lot to gain from family floaters as chances of everyone being hospitalised in a single year are low. Apart from convenience and cheaper premium, it gives your family access to a larger shared pool, compared to individual covers.

However, the math may not work out in favour of a floater policy if you are covering your parents under the plan, especially if they are senior citizens with a history of ailments. In such a case, the claims could be multiple and the amount high. If they are hospitalised, their medical expenses could exhaust the entire cover, depriving the rest of the family of the insurance cushion.

Independent covers for each, on the other hand, may be too expensive. In such cases, you can consider these newer plans, if they suit your needs and fit into your budget. Take a close look at the features, premium payable and limitations before taking a call. Also, if you have deductions under Section 80D on health premium in mind, don’t forget that only the member making the payment will be entitled for the same.

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