In the last few years, the incidence of chronic diseases has been on the rise all over the world. People have been spending large amounts of money as the cost of medical treatment has gone up. This is where medical insurance comes to one's rescue.

However, while earlier insurance policies were offered only by general insurance companies, now even life insurance companies have also jumped into the fray. As a result, we are seeing innovative products in the healthcare insurance segment, as well.

Here we analyse one of the recent products launched by ICICI Lombard. Known as a 'floater health insurance plan', this scheme covers all the members of a family for a single premium. The sum assured can be available to any of the members or to all the members, in case of any eventuality in a given year.

The policy covers medical expenses incurred as a patient during hospitalisation for more than 24 hours, including room charges, doctor's or surgeon's fee, medicines and other costs. This policy is similar to the typical mediclaim policy where one gets cover from 30 days prior to hospitalisation and 60 days post hospitalisation.

Also, day care expenses incurred on advanced technological surgeries and procedures like dialysis, radiotherapy, and chemotherapy requiring less than 24 hours of hospitalisation are also covered.

Let us look at the difference between the regular health insurance and the floater health insurance. We can study this with the following example. Say there is a nuclear family of three individuals: husband (age 34), wife (33) and child (6).

In a normal health insurance policy, this family would pay a premium of Rs 7580 per annum for health insurance of Rs 300,000 a year, Rs 200,000 and Rs 100,000 for husband, wife and child respectively. In the floater policy, the same family can get a total cover of Rs 300,000 across the three family members for a premium of Rs 6024 per annum.

In case of a normal health policy, you specify the sum insured against each family member. Also, if the expenses go beyond the specified amount, one has to bear the additional expense. The floater policy, on the other hand, provides each family member the benefit of the entire sum of Rs 300,000 insured under the policy.

Other features:

• They offer a continuous two-year protection with no increase in premium in the second year. This implies that one does not need to bother about renewal in the second year. There is an option for one-year cover, as well.
• No health check up required up to the age of 45 years.
• 5 per cent discount on premium for every claim-free year
• Policy exclusions include medical charges incurred, except those arising out of accidental injuries, within the first 30 days of the policy. However, this clause does not apply for subsequent renewal (without a break) of this policy.
• This policy is based on the probabilities of number of people from the family falling ill in the same year. So a young family has lower probabilities where the floater policy would be a cost saver to them. But as you get older, you should start looking at individual sum insured policies.