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Family Floaters are great alternatives to individual health insurance plans, for a variety of reasons. The cover amount basically ‘Floats’ amongst all the family members included under the plan, and is equally available to all of them!

They are simpler. The whole family is covered by a single policy. This makes them very convenient to manage, and keep track of. And second, they are very cost-effective.

In this article, let’s learn in detail about floater plans, their benefits and drawbacks

Here are some of the key features of a family floater that makes them a good option for families to secure their health insurance needs.

One large cover that can be shared across family members
This is one of the most fundamental propositions of family floaters. In an individual policy, a single person can only claim up to the sum insured allocated. But in the case of family floaters, the entire cover will be available for all the family members. So, if any member of the family undergoes a major hospitalisation, and needs a large cover, the entire amount may be used for their treatment.

Since it’s less likely that more than one member of the same family will undergo a major hospitalisation in a given year, a family floater comes in very handy.

Cost-effective compared to individual plans
Compared to individual policies, a family floater plan offers better and cheaper coverage for the entire family - especially when the age gap between the family members is less. A floater for people with nearly the same age will cost considerably less than individual policies of the same cover amount.

Single plan, single policy.
If you take an individual policy for every family member, you’ll have to maintain separate policies for each of them. You’ll also have to pay multiple premiums and keep track of many due dates and terms. But, in a family floater, since all your family members will be covered under one policy, you’ll only have one plan to manage, and a single premium to pay. You’re less likely to miss a payment and have your policy lapse!

But, there are also some drawbacks, you should be careful about.

Chances of one member exhausting the entire cover
Imagine you go to a restaurant with your friends and order an extra-large pizza. While all others are yet to start eating, one of your friends, who is super hungry, picks up one slice of pizza, finishes it, and quickly takes another slice. You look at how hungry he is and realize if he eats 1-2 more slices, you guys won’t have enough left. While this is a very light hearted example - you see what I’m getting to.

If one person of your family ends up using a large part of the sum insured, the rest of you might be left without sufficient health cover. And this can become a huge issue, when multiple members of your family get hospitalised at the same time, or within the year. Such cases could’ve been very rare in the past - but seeing how Covid impacted families in the last two years - it isn’t something we can totally disregard either.

One Incorrect declaration can put an entire family’s plan under scrutiny

If the insurer finds out that you have provided wrong or incomplete medical details - even for one member (be it intentionally or unintentionally) it can affect the entire family’s coverage. The insurer would either cancel the policy entirely or they may apply additional loading charges or impose restrictions to continue the policy. So, one has to be super careful while making declarations (in any health insurance, but), particularly with floater plans.

Who can you cover under a family floater plan?
Under a single family floater plan, you can insure multiple family members, including yourself, your spouse, up to four dependent children (less than age 25) and up to two parents (or) parents-in-law. Here are some things to note, while finding a good floater plan that fit your needs.

-Some policies also allow the combination of one parent + one parent-in-law to be covered. If that’s your need, make sure you ask your financial advisor about such a policy.

-Usually, you can only cover a maximum of eight people (as the above list) under one floater. However, there’s an exception to this.

-When the kids reach the age of 25, they will have to be moved to an individual health insurance policy, and removed from the floater.

A common question
In floaters, one person is taken as the primary policyholder/ proposer of the policy. All the other members are added as family. So - what happens when the primary policyholder or proposer of the policy passes away? Is the floater plan cancelled? Well - here’s the answer. If the proposer or the primary policyholder dies, any adult member can become the new proposer. There is a myth going around that the policy lapses when the primary policyholder passes away - that's not true.
Mental health is an important element of an individual’s overall health. It comprises psychological, social and emotional well-being of a person. Mental fitness leads to improvement in productivity, harmonious relationships with other people and ability to cope up with difficult situations. Ever since the pandemic hit across the world, mental health became a far more open and relevant issue.

During the pandemic, people were living in isolation as they confined themselves to their homes and practiced social distancing. Depression, anxiety, and stress became common problems owing to burnout faced because of work from home. All of this led to a realization that the overall well-being of a person comprises not just physical but mental health as well.

Every year, October 10 is celebrated as World Mental Health Day to increase awareness around mental health issues and promote their understanding. Various stakeholders deliberate solutions to cope up with this grave issue in order to reduce the number of suicides happening because of mental health problems.

Shift towards mental health awareness
There is a growing need to provide access to patients suffering from mental illness at par with those suffering from a physical ailment. We need to increase the number of mental health centres, councillors and doctors to help people cope up with depression. At the same time, we need to sensitize the community around mental health being a crucial part of our overall well-being, thereby reducing the stigma associated with it. A peer network of patients can be formed so that they can address their issues freely.

Health insurance – a dependable partner
When it comes to mental health, insurance can’t be left behind. In order to make mental healthcare available to all, certain guidelines were disseminated stating exclusion of treatment of mental illness, stress or psychological disorders, and neurodegenerative disorders shall not be allowed in health insurance. Following the guidelines, mental illness is now covered by all health insurance plans and considered at par with any other physical illness. So, if you already have a health insurance policy, you are very well protected financially because all kinds of mental illness will be covered by your insurer.

However, if you don’t have a health insurance policy, you should definitely buy one immediately under a proper guidance of Insurance Advisor. A comprehensive health insurance plan will certainly come at your rescue in covering these expenses. It would save you from shelling out money from your own pocket at the time of a medical emergency. So, it’s better to be prepared financially than repent later on.

When you plan to buy a health insurance plan for coverage for mental illness, a crucial point to consider is whether you want Out Patient Department (OPD) or In Patient Department coverage. Generally, health insurance plans provide coverage for mental illness as in-patient hospitalization. Therefore, if you want coverage for medical consultation or therapy for mental illness, then you should consider those plans that provide coverage for OPD expenses.

It is important to check how much OPD coverage is being provided before buying a health insurance plan.

The primary purpose of having a life insurance cover is to help the surviving family members maintain the same standard of living after one's death. This would require adequate protection to the nominees so that they are financially secure even after the bread earner's death.

To ensure this, the proposer (one who takes insurance on one's name) nominates his/her family members. However, merely nominating family members may not serve the purpose as nomination only ensures that the insurer hands over the death claim proceeds to the nominees and the legal heirs may still lay claim on the proceeds.

How beneficial nominees is different from nominee
Nominees till now acted as receivers of the insurance proceeds on behalf of the legal heirs of the policyholder. The revised Insurance (Amendment) Act 2015 has created a 'beneficial nominee' category, which clearly make the nominees such as spouse, parents and children as the final recipients of the insurance proceeds.

If a person nominates someone as a 'beneficial nominee' then the nominee becomes both the receiver and the final beneficiary as per this new clause. The new clause also makes it simpler for the policyholders to specify multiple beneficial nominees and their share in the proceeds.

Why nomination is not sufficient
It is to be mentioned here that a husband can also name his wife and kids as beneficial nominees in a life insurance policy. Once beneficial nominees are named no one else can challenge their right to the death benefits of the policy. However, the beneficial nominees so named can be changed during the tenure of the policy. This means that in case of divorce or under the influence of other family members the husband can change the beneficiaries of the policy at a later stage.

Buying life insurance under MWP Act can be a solution
The proceeds of a life insurance policy may still be recovered by one's creditors if some money is due to them or even by the legal heirs of the deceased. Their rights supersede that of beneficial nominees.

To avoid such a situation, one can buy the policy under Section 6 of the Married Women's Property Act (MWP), which gives special protection to one's wife and children, and prevents creditors from attaching a life insurance policy taken under this Act.

Who can take for whom
Any married man residing in India (except Jammu and Kashmir) can avail benefit under this Act. 'Married man' here also includes a widower and a divorcee who can name his children, if he wishes, as beneficiaries in a policy endorsed under this Act Under the MWPA only the wife and children can be named as beneficiaries. Consequently, no other family member or any other heir can lay a claim to the policy benefits. Thus, even if the husband and wife divorce after the policy is taken, the beneficiaries (wife and/or children) will continue to remain the same

How to go about it
This can be done by simply filling in a MWP addendum while applying for insurance, without formally creating a settlement deed or a trust separately. This benefit can only be obtained while taking the policy. Further, any addition or changes in the endorsement of the policy under the MWP Act is not allowed later on which means that even the husband (the insured) cannot change the beneficiaries of the policy later on.

Safeguards under MWP Act
Once the policy is bought under the MWP Act, it simply means that any insurance policy taken by the husband and endorsed under the MWPA in favour of his wife or children or any of them, will always be their property. None of the husband's creditors will have any right over the policy. Even the husband's parents won't have any right to the benefits. In fact, the husband will also have no rights over the survival benefits of the policy, if any. As per the Act, as long the beneficiaries named in the policy are alive, no one else will have any right to the benefits.

This is particularly relevant in case of a joint family as there can be other claimants to the policy proceeds if the insured dies. Therefore, do not overlook it to avoid any legal hassles for surviving family members.

As they say, a crisis should never go to waste. It challenges us to learn something new and hence we must use it cleverly to benefit ourselves, thereby rising to the next level of our potential. The COVID-19 pandemic has, sadly, affected many people in several countries and led to many changes in the way of living. For instance, complete lockdown, wearing a face mask all the time, avoiding going to public places, taking care of hygiene, etc. has become the new normal. The impact was so quick and widespread that we were forced to rediscover the value of some old crises and learn new ones from it. Here is a list of some major lessons that the pandemic has taught us.

1. Hygiene is Important
To avoid the spread of COVID-19 pandemic, we all have been taught to wash our hands with soap and water whenever necessary. For instance, after touching a surface that could have disease-causing germs, when returning home from outside, before and after eating food, etc. Hence, the pandemic has made us understand the importance of hygiene all the way more than ever.

2. Lockdown Helps
Another thing we learnt from COVID-19 pandemic is that lockdown helps in curbing the spread of a disease. Yet it was not followed in many areas. But it was witnessed that the areas in which lockdown took place promptly, were able to recover quickly.

3. Not Much is Needed to Live
Living through the lockdown made us understand that we need minimal to live. All that is actually required is food, water, shelter, medicines, communication, entertainment, education, and we can get going. Despite the lockdown, we were able to fulfil our needs in a different way and yet be satisfied, thereby discovering what we actually need.

4. It is Possible to Telecommute
The work from home culture has gained a lot of attention as it was the only option left during complete lockdown in India. The BPOs, IT sector, and a lot of companies have demonstrated that even if someone is in another continent, working remotely could be an option to continue managing work-related responsibilities and yet still be productive.

5. Society is Important
During the pandemic, we all came together to help each other, Be it the frontline workers who did their job effectively, or the neighbours, friends, relatives who helped each other in need. For instance, cooking and distributing food to the ones in need, distributing the needed supplies like PPE kits, soap, sanitiser, and other protective equipment. Many did not let the pandemic affect the wages of their domestic help. In short, people stood by each other on humanitarian grounds, thereby helping us understand the importance of living in a society.

6. We Are Living beyond Nature’s Boundaries
During the lockdown, as people were locked inside their homes, it was seen that nature was rejuvenating itself. The chirping of birds, sights of animals on the roads, clean water of rivers, blue skies, made it evident that it was high time that required some healing. We were messing with our environment badly, which the climate protagonists had been reminding us of, from time to time. But only the lockdown made us stop from messing with it even further. Although the aforementioned list of lessons learnt from COVID-19 pandemic is not exhaustive, it provides food for thought. Learning everything from the points discussed might be too much to ask for, but if we try to adopt even half of it, we all will be better off.
Please mark all your queries / responses to
Information provided on this newsletter has been independently obtained from sources believed to be reliable. However, such information may include inaccuracies, errors or omissions. and its affiliates, information providers or content providers, shall have no liability to you or third parties for the accuracy, completeness, timeliness or correct sequencing of information available on this newsletter, or for any decision made or action taken by you in reliance upon such information, or for the delay or interruption of such information. , its affiliates, information providers and content providers shall have no liability for investment decisions or other actions taken or made by you based on the information provided on this newsletter.