Group Health Insurance vs. Family Floater Insurance

Group health vs. family floater insurance: Most policy buyers get confused about which one is better for them, since both cover the insured and their families. However, it is necessary to understand that group health insurance and family floater policies have different eligibility criteria, coverage and benefits.

Knowledge of both insurance policies will help you make informed decisions about protecting yourself and your loved ones.

What is Group Health Insurance Meaning?

A group health insurance policy is health coverage provided by employers to their employees. These employee insurance plans cover insured members under a single policy. They provide coverage for a wide range of medical expenses, such as hospitalisation and day-care procedures, and sometimes, they also cover pre-existing conditions.

Buying a group health policy is considered cost-effective, as the premium price is often shared between employees and employers. Thus, it is an affordable and convenient coverage plan for officer workers. A group health insurance plan from leading insurers like TATA AIG may cover the employees’ families as well, depending on the plan type.

What is Floater Policy in Health Insurance?

Floater insurance meaning private health insurance policy that provides coverage to all the insured family members under one policy. The plan provides a fixed sum insured amount that insured family members can use during a medical emergency.

The premium amount of the family floater plan is usually based on the age of the eldest family member and the number of members to be insured. It is a great health insurance option for families looking for comprehensive coverage under one plan.

Difference Between Group and Family Floater Health Insurance

Coverage

• Group Health Insurance: Group insurance provides uniform coverage to all the insured members under the plan. These are usually standard benefits pre-determined by your employer.
• Family Floater Insurance: Family floater insurance allows you some flexibility. The benefits and coverage can be customised to fit the family’s health insurance needs.

Eligibility Criteria

• Group Health Insurance: An employee is covered under group health insurance as long as he is working for the employer/company. After his disassociation, he is no longer covered under the group insurance.

This means that if he gets medical services after leaving the company, his group insurance will not cover them.

• Family Floater Insurance: Family floater plans are private plans that can be bought by any individual over the age of 18. As long as they are paying the insurance premium, the person and their family will be covered under the family floater plan.

Premium Price

• Group Health Insurance: The Premium of a group health insurance policy is usually lower as the risk gets distributed among the group members. Moreover, your employer will be the one who bears a part of the premium payment.
• Family Floater Insurance: The plan has a higher premium price than group insurance. This is because the individual plan is customised according to the family’s coverage needs, and you solely have to bear the premium cost.

Claim Settlement Process

• Group Health Insurance: Any claims made for group health insurance are settled by a Third-Party Administrator (TPA) appointed by the insurance provider.
• Family Floater Insurance: The family floater claim process could be determined by either the insurance company or the Third-Party Administrator (TPA).

Tax Benefits

• Group Health Insurance: For group insurance, the premium cost is borne by the employer.However, as an employee, you can also get tax benefits if you pay additional premiums over the group health insurance policy.
• Family Floater Insurance: As an individual contributor of family floater insurance, you can avail yourself of tax benefits under Section 80D of the Income Tax Act.

Policy Renewal

• Group Health Insurance: Group health insurance cannot be renewed independently by the insured; the employer deals with it. Thus, once you leave an organisation, you will not be covered by group insurance.
• Family Floater Insurance: This is a private insurance plan that you buy independently for yourself and your family. Thus, renewal is easy as long as you pay the premiums.

Final Words

A detailed comparison between group health insurance and family floater plans can explain their benefits. As a policy buyer, you can buy either group health insurance or a family floater. As an employee, you must be aware that some group health insurance plans extend their coverage to employees’ family members, too.

Keeping all these points in mind, choose the right insurance plan as per your coverage needs.