InsuranceFinancial Glossary
Floater Policy
Definition
A health insurance plan that covers the entire family (typically self, spouse, and children) under a single sum insured. Any family member can claim up to the full sum insured, but the total payout across all members cannot exceed it in a policy year.
Why It Matters
Floater plans cost significantly less than individual plans for each member. However, if two family members are hospitalized in the same year, the shared sum insured can get exhausted quickly. For families with elderly parents or members with pre-existing conditions, a combination of floater and individual plans often works best.