Family floater plans offer a convenient, shared sum insured for all family members. While it is cost-effective, the main risk is that a single major illness or multiple hospitalizations in the same policy year can exhaust the limit, leaving other members unprotected. In this case study, we examine how a family handled this exhaustion crisis.
The Back-to-Back Hospitalizations
A family of four had a ₹5 Lakh family floater health policy. In July, the father was hospitalized for dengue treatment, which cost ₹1.8 Lakhs. Two months later, the mother was admitted for a planned hysterectomy surgery, costing ₹3.2 Lakhs. These two claims exhausted the ₹5 Lakh sum insured completely. In November, their son contracted typhoid, requiring a 5-day hospitalization costing ₹1.2 Lakhs.
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The Out-of-Pocket Burden and the Restore Benefit
Since the sum insured was exhausted, the son's cashless admission was denied. The family had to pay ₹1.2 Lakhs from their savings. They later realized that their policy did not include an automatic 'Restore Sum Insured' benefit, which refuels the sum insured once it is exhausted during the year. This case highlights why a basic ₹5 Lakh cover without restoration riders is inadequate for a family of four.
- Always select health insurance policies that offer an automatic 'Restore' or 'Reassurance' sum insured benefit.
- For a family of four, aim for a minimum sum insured of ₹10 Lakhs to absorb double hospitalization risks.
- Consider buying a cheap 'Super Top-Up' policy with a ₹5 Lakh deductible to build a high cover of ₹20-30 Lakhs.
- Review your restoration rules: verify if the restore benefit applies to the same illness or only to different illnesses.
