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Impact of Family Size on Health Insurance Costs: A Comprehensive Guide

TeamAckoNov 25, 2025

Hectic schedules, lifestyle, accidents, and pollution are a few factors that can affect your family’s health. Moreover, the rising expenses of medicines and healthcare facilities can be stressful, for which healthcare planning also becomes an essential part of life.

Hence, family health insurance is the best gift you can give to your loved ones. However, before availing a family health insurance plan, you must understand its impact on your health insurance cost. In this blog, we will discuss the impact of family size on your health insurance cost, how it works and other necessary details.

Contents

Does Family Size Impact Your Health Insurance Cost?

Yes, family size impacts your health insurance cost. When you buy a family floater health insurance plan, all your family members are covered under one single policy. The total coverage amount (sum insured) is shared among everyone.
If you add more people to the plan, the premium, or the amount you pay for insurance, increases. This is because the risk of claims goes up when more people are covered. The age of the oldest family member also matters a lot. The higher their age, the higher is the risk to the insurer and thus the premium increases.

Remember two things here:

More family members = higher premium
Older family members = higher premium

Even if this is true, a family floater plan usually costs less than buying individual health insurance plans for each person.

How Does Family Health Insurance Work?

A family health insurance plan is a comprehensive health insurance policy. It assists you financially when any insured member of your family gets hospitalised. Unlike individual health insurance policies, this plan enables you to insure your entire family under a single plan.

Example
If your family health insurance plan has a sum insured of Rs. 7 lakh, and an insured member gets hospitalised, you can use this amount to pay the expenses. However, if the expenses are less than Rs. 7 lakh, the other insured family members can use the remaining amount in case of another medical emergency.

In this way, all the family members can share the sum insured of this plan. If in case one member uses the entire amount, you will have to bear the treatment cost of other members.

Example: How Family Size Changes the Premium

Here’s an idea of how premiums may vary for a ₹10 lakh family health insurance plan.

Family Size	Approximate Annual Premium
2 adults	₹18,000 – ₹22,000
2 adults + 1 child	₹22,000 – ₹28,000
2 adults + 2 children	₹25,000 – ₹35,000
2 adults + parents	₹40,000 – ₹55,000

Note: These numbers are just examples. Actual premiums depend on the insurer, ages, city, and health conditions.

Benefits of Opting Family Health Insurance Plans

Here are a few notable reasons why you should opt for health insurance plans for the family:

Avoid Financial Issues

Opting for family health insurance will enable you to avoid a financial crunch during medical emergencies. These emergencies can be emotionally challenging, and the financial burden will worsen the matter. Hence, a family health insurance policy will help you cope with such issues.

Access to Medical Care

Availing family health insurance enables you and your family to access timely medical care. It will cover your expenses related to preventive care, like vaccinations and annual check-ups. Hence, it will help you and your family stay healthy and active, and avoid any expensive medical problems.

Coverage for the Entire Family

A family health insurance plan covers the entire family under one policy. You can cover yourself, spouse, dependent children, dependent parents and dependent parents-in-law. Moreover, some policies even allow you to add your extended family members to the plan.

Affordable Premiums

The family health insurance monthly premium is more affordable than individual health insurance plans for each member. Hence, it makes the family health insurance policy an affordable option for everyone in your family.

Also read: 7 Advantages of having a family insurance plan

Choosing the Right Sum Insured for Your Family Health Insurance Plan

Your sum insured should be enough to cover everyone’s medical needs, without being too expensive. Here are tips to help you decide your ideal health insurance coverage.

For a small young family, ₹7–10 lakh coverage is usually enough.
If you live in a metro city or have senior citizens in the family, ₹15–25 lakh is better.
For parents or people with health conditions, choose a higher sum insured.
Use ACKO’s health insurance premium calculator to find out what works best for you.

Things to Consider Before Buying Family Health Insurance

You must consider certain things before buying a family health insurance plan for your family. These things are as follows:

Sum Insured

You must choose a higher sum insured if the plan includes your parents or any member with pre-existing medical conditions or a high-risk lifestyle. However, the sum insured must be affordable so it does not strain you financially.

Premium Amount

This is how your health insurance premium amount gets increases.

If you opt for a medical insurance policy for your family with a high sum insured, the premium amount will increase.
If you opt for additional coverage such as accidental death, dismemberment, or critical illness, it will increase your premium.
Increasing the existing policy's sum insured will also lead to an increase in their premium amount.

Hence, you must choose a family health insurance plan that aligns with your financial status.

Hospital Coverage

Cashless treatments mean that you do not have to pay the hospital for the expenses. The insurance company will pay the bill directly to the hospital. Hence, you must choose an insurance company that covers the hospital near your home or workplace. Hence, it will reduce your financial burden during a medical emergency.

Claim Settlement

One of the most crucial phases for a policyholder is when they need to raise a claim for medical expenses. The process of claim settlement has to be simple and smooth. Hence, you must choose an insurer with a smooth and straightforward claim settlement process.

Pre and Post Hospitalisation Coverage

Medical expenses can occur before and after the hospitalisation of an insured member. These expenses may include diagnostic tests, doctor visits, and medications. In addition, you must check whether the plan covers daycare procedures, as it will reduce the financial burden on you.

Other Factors That Affect Health Insurance Premium

Besides family size, other things can also affect your premium:

Age: The oldest member’s age impacts the cost the most.
Health history: Pre-existing diseases can raise the premium.
Lifestyle: Smoking, drinking, or a stressful lifestyle may increase costs.
Sum insured: Higher coverage means a higher premium.
Add-on covers: Adding options like critical illness cover or accident cover increases the price.
Policy duration: Long-term plans sometimes offer discounts.
Location: The price of a health insurance policy may change depending upon your location. Some plans may cost higher in urban areas.

Why Choose ACKO Family Health Insurance?

With ACKO, buying and managing your health insurance is simple.

Affordable premiums for all family sizes
11,500+ network hospitals for cashless treatment
Easy digital claim process through the ACKO app
Transparent pricing, no hidden charges
Flexible sum insured options to fit your needs

Protect your loved ones with ACKO Family Health Insurance Plans and stay stress-free during medical emergencies.

Wrapping up!

Your family size impacts the family health insurance cost as you have to pay additional premium amounts if you add new members to the plan. However, since the treatment cost is rising, availing a family health insurance plan is more affordable than individual health insurance plans as it reduces your financial burden arising during medical emergencies.
Opt for an ACKO Family Health Insurance Policy today with multiple benefits and cashless hospitalisation in some prominent hospitals across India.

Frequently Asked Questions

Given below are answers to some commonly asked questions about health insurance costs.

Does health insurance cover all family members?

You can avail a family insurance policy to cover your family members in one plan. It will cover the medical expenses of your family under one policy.

Can I add my parents to the family health insurance policy?

Yes, you can add your parents to the family health insurance plan. In addition, you can add your spouse, dependent children and dependent parents-in-law to the policy.

Can I remove a family member from the family health insurance plan?

Yes, you can remove a family member from the family health insurance policy. To do this, you must contact the insurer and request them for the removal of a member.

How much does Rs. 10 lakh health insurance cost to a family of 4 members?

A family health insurance plan for 4 members with a sum insured of Rs. 10 lakh will cost between Rs. 25,000 to Rs. 40,000 per annum.

What is the maximum mediclaim limit for a family health insurance plan?

The family health insurance plan's maximum medi claim limit depends on the sum insured you choose while buying the plan.

How to choose the best family health insurance plans?

You must consider the following points to choose the best family health insurance plan:

Understand your insurance requirements and your budget.
Compare various insurers and plans according to your requirements.
Compare the premiums and coverage to make an informed decision.

Can I claim tax benefits for family health insurance premiums?

Yes. You can claim deductions under Section 80D of the Income Tax Act for premiums paid for yourself, your spouse, children, and parents.

What happens if the sum insured gets exhausted during the year?

If your coverage limit is used up, you’ll have to pay from your pocket. Some plans offer a refill or restoration benefit, which restores your sum insured automatically.

Secure Your Future with Term Life Insurance

A 1 crore term insurance policy is one of the best options considering the rising living costs. It provides extensive coverage at affordable rates, thereby easily giving significant financial security to your family. A well-thought-out term insurance plan can help you navigate tax relief, as premiums are eligible for tax deductions.

Whether securing your family's future or gaining tax benefits, life insurance provides a robust means of managing both. Remember, a reliable life insurance calculator can help you find the right coverage and premiums that are well-aligned with your financial goals and budget.