Family Floater

Example

“The family floater health policy has a $50,000 annual limit that can be used entirely by one family member if needed, or shared among all covered family members throughout the year.”

Memory Tip

Think of coverage that 'FLOATS' around the family - it moves to whoever needs it most, like a life preserver floating to whoever needs rescue.

Why It Matters

Family floaters can provide cost-effective coverage for families while offering flexibility to handle varying individual needs throughout the policy period. This structure can be particularly beneficial when one family member has unexpectedly high expenses while others need minimal coverage.

Common Misconception

People often assume that each family member has their own separate coverage limit under a family floater. In reality, there's typically one shared limit for the entire family, which means if one member uses most of the coverage, less remains available for other family members.

In Practice

The Johnson family has a $75,000 family floater health policy covering parents and two children. When their teenage son breaks his leg requiring $25,000 in treatment, that amount comes from the family's shared limit, leaving $50,000 available for the rest of the family for the remainder of the policy year. If they had individual $20,000 policies instead, the son's treatment would exceed his individual limit.

Etymology

The term combines 'family' with 'floater,' which in insurance refers to coverage that can move or 'float' between different items or people rather than being fixed to one specific subject.

Common Misspellings

Related Terms

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Other insurance terms you should know

See Also