When it comes to buying a family health insurance plan, it is common to add parents to the policy. While it may seem like a good idea, there are several reasons why it might not be the best choice for you. In this article, we will explore why you shouldn’t add parents to a family health insurance plan and what other things to consider when buying this kind of plan.
- Increased premium
In a family floater plan, the insurer sets the premium based on the age of the oldest covered member. This minimises the insurer’s liability because as a person ages, his/her risk of developing illnesses increases, leading to more frequent claims.
If you purchase a family floater plan with a sum insured of Rs 8,00,000 that covers your 5-year-old daughter, 28-year-old spouse, and yourself (assuming you are under 40), the premium will be relatively low. However, the cost will significantly increase if you add your senior citizen parents to the plan.
You can deal with this situation by purchasing separate health insurance plans for your parents and supplementing it with a critical illness rider.
- Pre-existing disease
It is vital to consider that as the family’s oldest members, parents are more susceptible to various health conditions with age. Therefore, if you decide to add your parents to your family floater plan, there is a likelihood that the premium may increase, particularly if they have a pre-existing condition.
Let’s say a policy buyer’s father has a heart condition that existed before he wants to add him to his family health insurance plan. If he still wants to include him, the insurance company may charge a higher premium because of the increased risk associated with his medical condition.
- Impact on NCB
Comprehending the mechanics of the no-claim bonus (NCB) in health insurance policies is crucial. Normally, refraining from making claims in a policy year could qualify you for a reduction in the renewal premium or added perks. However, with family floater policies, the NCB for the entire policy vanishes in an instant if any family member files a claim.
As the policyholder ages, his health may deteriorate, making him more susceptible to illnesses and increasing the likelihood of hospitalisation. If his parents are on his family floater policy and need hospitalisation for a pre-existing condition or sudden illness, the NCB for the whole policy gets impacted.
- Insufficient coverage
Although your current family floater policy might sufficiently cover a family of three with Rs 8,00,000, it may not be enough if you plan to expand your family to five members by including your parents. Moreover, if any of your family members suffer from a recurring medical condition that demands frequent hospitalisation, the current coverage amount could fall short when you need it the most.
In this case, if you wish to include your parents in your existing family health plan, it is crucial to review the sum insured provided by the policy and increase it if necessary. This will ensure that your family has sufficient coverage in case of any medical emergencies or hospitalisation needs.
- Higher Co-payment and Deductibles
Co-payment and deductibles are the amounts that policyholders have to pay out of their pockets before the insurance company starts covering the costs. When you add parents to a family health insurance plan, the co-payment and deductibles may increase significantly. This can result in greater out-of-pocket expenses for you and your parents.
- Increased waiting periods
When you add parents to a family health insurance plan, the insurance company may impose a waiting period before they can claim benefits. Depending on the covered medical conditions, this waiting period can last from a few months to a few years. If any other covered member requires medical treatment, they will be responsible for the costs during this time.
Key considerations when buying a family floater plan
- Coverage and Benefits: Ensure the policy covers the medical expenses you anticipate will arise and provides sufficient benefits to each member. Look for add-on features like maternity benefits and costs incurred before, during, and after hospitalisation.
- Network hospitals: Go through the list of network hospitals covered under the family floater plan. Ensure that the policy covers hospitals in your city or region and that they provide quality medical services. Additionally, check if the policy offers cashless hospitalisation facilities or if you need to pay for the medical expenses upfront and file for reimbursement later.
- Waiting periods and exclusions: Most family floater plans have waiting periods and exclusions for specific medical conditions. Check the waiting period for pre-existing conditions, and ensure that the policy covers the medical conditions you or your family members may have.
Conclusion
Choosing the right family floater plan can ensure your family’s healthcare needs get met without causing financial stress. Buying separate senior citizen health insurance is advisable if your parents are over 60 with multiple pre-existing ailments. Also, consider the above factors when selecting a policy to make an informed decision and provide the best possible coverage for your family.
