What Is Family Floater Health Insurance Plan

Posted on: Dec 15, 2025 | 3 mins | Written by: HDFC ERGO Team

What Is Family Floater Health Insurance Plan

Investing in health insurance is one of the most important financial decisions you can make. However, if you have multiple family members, buying individual health insurance policies for each person can be costly and involve extensive documentation.

This is where a family floater health insurance plan becomes a practical solution. By covering all eligible family members under a single policy, family floater plans are more cost-effective and far easier to manage than multiple individual policies. Read on to know more about what is family floater in health insurance and its benefits.

What is a Family Floater Health Plan

A family floater health insurance plan provides coverage for the medical expenses of all listed family members under one common sum insured. You pay a single premium, and the coverage can be used by any insured member as required.

The premium for a family floater plan is typically calculated based on the age of the oldest insured member. Most policies cover you, your spouse, and dependent children. Some insurers may also allow coverage for dependent parents, siblings, or in-laws, usually at a higher premium.

Here is an example to explain how a family floater plan works:

Mr A purchases a family floater health insurance plan with a sum insured of ₹5 lakh for himself, his wife, and two children, at an annual premium of ₹10,000. During the policy year, the maximum claim amount available for the entire family is ₹5 lakh.

If the first claim is ₹2 lakh, the remaining coverage available for the rest of the policy year reduces to ₹3 lakh. If a single claim of ₹6 lakh is made, the insurer will pay only up to the sum insured of ₹5 lakh, and the remaining ₹1 lakh must be paid by Mr A from his own pocket.

Benefits of Family Floater Coverage

Family floater plans offer several advantages, like:

• Easy to manage:

Managing a single policy and paying one premium is far simpler than handling multiple individual policies for different family members.

• Affordable:

Buying individual health insurance plans for each family member can significantly increase costs. A family floater plan provides coverage for everyone at a comparatively lower premium.

• Easy to add immediate family members:

Adding a new family member, such as a spouse or a newborn child, is usually straightforward under a family floater policy, without the need to purchase a separate plan.

• Tax benefits:

Premiums paid for family floater health insurance plans are eligible for tax deductions under the Income Tax Act, 1961.

Who Should Choose a Family Floater Policy

Family floater health insurance plans are best suited for young families where members are generally healthy and less likely to make frequent claims. Since the premium is calculated based on the oldest member’s age, including senior citizens can significantly increase the cost. In such cases, it is often more economical to purchase separate health insurance plans for senior family members.

Tax Benefits of Family Floater Health Insurance

Premiums paid for family floater medical insurance qualify for tax deductions under Section 80D of the Income Tax Act, 1961, subject to applicable limits:

• If insured members are below 60 years of age: Up to ₹25,000 can be availed of

• If insured members include senior citizens (60 years and above): Up to ₹50,000

Things to Keep In Mind While Buying a Family Floater Plan

Some tips to help you choose the best family floater plans are:

Understand the Coverage

Most family floater plans cover hospitalisation, surgeries, diagnostic tests, ambulance charges, and related medical expenses. Always review the policy document carefully for inclusions, exclusions, and optional benefits such as maternity coverage, if required.

Policy Tenure

Opt for plans with a two- or three-year tenure, as they reduce the hassle of annual renewals and may also offer long-term discounts.

Reinstatement of Coverage Amount

Since multiple family members share a single sum insured, the coverage can be exhausted quickly. Choosing a policy with a reinstatement or restoration benefit ensures that the sum insured is replenished after a claim during the policy year.

Benefits Offered

Look for additional benefits such as 24/7 customer support, free health check-ups, discounts on medicines, and wellness programmes for better value for your money.

Claim Settlement Ratio

Always compare insurers based on their claim settlement record. Selecting an insurer with a claim settlement ratio of 90% or higher can ensure smoother, faster claim processing.

Terms Related to Sub-Limits

Sub-limits define maximum payable amounts for specific expenses such as room rent, diagnostics, or treatments. Understand these limits to avoid unexpected out-of-pocket expenses.

Alternative Medicine Treatments

If preferred, choose a policy that covers AYUSH treatments, including Ayurveda, Yoga, Unani, Siddha, and Homoeopathy.

Conclusion

A family floater health insurance policy offers broader coverage for your entire family under a single policy, making it cost-effective and easy to manage. With simplified documentation, affordable premiums, and shared benefits, these plans are particularly beneficial for young families. However, to keep premiums reasonable, it is often wise to insure senior citizens under separate plans. Carefully reviewing policy terms and features will help you get the maximum value from your health insurance.

Disclaimer: The above information is for illustrative purposes only. For more details, please refer to the policy wordings and prospectus before concluding the sales.

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