Family health insurance is a more comprehensive type of insurance that provides a combined coverage for all the members of the family under one policy. It generally provides cover for a number of diseases within a single unified plan and depending on the plan chosen, it could be more than one time for one disease for all the members. It functions on a fixed sum ascertained for the policy to provide for the entire family that enables the family to multiple claims for each person covered within the specified duration/ term of the plan.
Under varied conditions, family health insurance plan can stand as much more advantageous in specific circumstances for a particular family as compared to the individual plans for everyone separately. The family health insurance is availed at an accumulative premium cost for all the members at one go and thus, comes to be cheaper than the individual plans. In a family plan, the premium is typically calculated in relation with the eldest member and also, the insurers are not given renewals beyond a certain age.
Despite of obvious reduction in cost and access to a wider range of diseases covered and also the ease of managing just a single policy that covers all, there are certain drawbacks as well such as the entire No Claim Bonus getting diluted for the whole year, in case of even a single claim by one person. Also, in most cases, the policy cover cannot be extended to the grandparents or in-laws and thus, there is need for an individual policy for them, any which ways.