I am not saying that you should not purchase health cover for your parents. You should. It is your responsibility to ensure quality health care for the family, including your parents. All I am saying is that you should purchase separate plan for them rather than including them in your family floater plan.
I am aware that some of the plans are sold with the “added advantage” that you can also add your parents to the plan if you so wish. In my opinion, you are better off avoiding this trap.
You may be better off purchasing a separate health insurance plan for them. Here are a few reasons why you should not include your parents in your family floater.
Reason #1 The premium in a family floater plan depends on the age of the eldest member
I have covered this aspect in detail in another post. If you include your parents in your plan, their age will be the determinant of premium.
Let’s consider with the help of an example.
You have already purchased a family floater of Rs 10 lacs. Self (30), Spouse (30) and daughter (2). Your parents are both 60.
I checked the premium of a health insurance plan from a private health insurance company that provides Rs 1 lac cover for each member and an additional floater cover of Rs 10 lacs (that any member can use).
The cover for nuclear family (self, spouse and daughter) costs Rs 26,408.
If you purchase the cover only for your parents, it costs Rs 75,340.
If you purchase the cover for the entire family (including your parents), it costs Rs 101,808.
You could have purchase separated covers for yourself (spouse and daughter) and your parents and the premium outgo would have been Rs 101,808 (Rs 26,408 + Rs 75,340). Your total family cover would have been Rs 25 lacs (Rs 1 lac each for each member + 2 X Rs 10 lacs floater cover).
Of course, the cover for your parents can be used by you or vice-versa.
If you had purchased the cover under a single plan, you would have paid the same price and got much lower cover of Rs 15 lacs ( Rs 1 each for each member + Rs 10 lacs floater cover).
For the same price, you are getting much higher cover (for the family) by purchasing two separate family floater plans rather than clubbing all the members under the same plan.
By the way, most plans do not allow adding more than two adults in the same plan. Therefore, in most cases, you will not be able to commit this mistake even if you want to.
Reason #2 Pre-existing illness will load the premium for the entire family
This is argument against family floater plans in general (and not just against including your parents in floater plans).
If any one of the members has a pre-existing illness (that can result in increase in premium), the premium for the entire family will be loaded. Therefore, it is better to keep such member out of the family floater and purchase an individual health insurance plan for him.
With age, you contract one illness or the other. Therefore, if you include your parents in the family floater, the premium for the entire family can be loaded in case your parents have a pre-existing illness.
Reason#3 No-claim bonus may be affected
You get no-claim bonus Sum Insured for every claim-free year. In a family floater, if any of the members makes a claim, there will be no-claim bonus for the next year.
As you get older, your health condition deteriorates. Therefore, there are greater chances of getting hospitalized at an old age.
If your parents were in a separate plan and were to get hospitalized in a policy year (God forbid), no-claim bonus from only their plan will be affected.
Reason#4 There may be little coverage left for you
A cover of Rs 10 lacs may be enough for 4, but may not be enough for 6 persons.
If one of the members in the family does not keep well and keeps getting hospitalized, the other members may not be left with much coverage.
Therefore, if you are considering including your parents in your family floater plan without increasing the Sum Insured, think again.
It is better to purchase separate health insurance plan for your parents. Including your parents in the plan is likely to increase premium costs.
If there is a big age gap between your parents or either of them has a pre-existing illness, you may even consider purchasing individual plans for each of them (rather than purchasing a family floater cover your mother and father).