The “Family Plan” Illusion: Why Putting Everyone on One Policy Might Be a Terrible Idea
A family health insurance plan sounds logical, doesn’t it? One policy, one payment, everyone covered. Easy. Convenient. Until you actually start doing the maths. In reality, the idea of putting everyone under one policy roof is often far from cost-effective. And in some cases, it can lead to unnecessary expenses, renewal complications, and a few nasty surprises when it comes to claims. Let’s break down when a family plan makes sense — and when it really, really doesn’t.
Myth #1: “One policy for all = cheaper”
Not necessarily. In the world of International Private Medical Insurance (IPMI), true family discounts are rare. Yes, some insurers dangle a 10–15% discount to make the family plan seem appealing — but that’s usually a one-time carrot. By the time renewal comes around, it disappears. And if you’ve had any significant claims during that first year, switching providers becomes complicated. Because exclusions will most likely be applied.
That’s not to say family plans never work. If your children are still in school or studying at university in the UK, insurers will often apply a “dependant rate”, which is noticeably cheaper than a “young adult” rate for somebody exactly the same age.
But even then, it’s often much easier and smarter to split - one child attached to each parent and once they’re grown, set them up with their own policy. Simple and efficient.
Myth #2: “If one family member has higher claims, that’s fine — we’re all covered”
And this is the biggest trap of all. Let’s take a simple example:
Daughter - barely uses the policy.
Dad - goes in for the occasional check-up or physio session.
Mum - treats the policy like an open bar. Every ache, scan and specialist visit is on the list.
Now, IPMI policies are usually community-rated. That means your claims technically shouldn’t affect your premium. But here’s the industry’s “unofficial” reality - if your claims exceed 100% of what you paid for two years in a row, then most insurers will quietly add claim adjustment to your renewal. And since the policy is shared, that uplift applies to everyone on the plan. Even the ones who didn’t use it.
Myth #3: “Let’s include the grandparents and aunties too — keep the whole family under one roof”
Nope. Doesn’t work like that. Insurers generally only allow immediate family members (i.e. partners and children) to be on the same policy. Extended relatives? Separate plan.
And if they’re over 60, underwriting will likely be different — and premiums will certainly reflect that.
Myth #4: “Let’s keep everyone on the same level of cover — makes life simpler”
Sure, it’s simpler. But also… expensive and unnecessary. Take a common case:
The wife wants to include private maternity coverage. The husband, understandably, doesn’t quite need it. Maternity-inclusive policies often cost 30–40% more than standard ones.
So if everyone’s on the same level of cover — even those who’ll never use maternity — the price goes up dramatically. Why pay for something you’ll never touch?
This is the equivalent of buying a family gym membership where everyone’s forced into kickboxing classes. And all you wanted was the pool.
Split the policy. Tailor the cover. Save money. It’s that simple.
So what’s the right move?
Before buying any policy, whether its family or not, ask yourself:
• Why are you getting this cover?
• How will you actually use it?
• What’s changing in the next year or two?
• Are you planning to have children?
• Are your kids moving abroad for uni?
• Does one partner almost never use medical services?
A family plan isn’t inherently “better.” Sometimes it’s the right tool. Sometimes it’s a costly mistake, wrapped in a bit of marketing spin. Structure your policy around your reality, not assumptions and definitely not around what sounds convenient on paper.
A family health insurance plan sounds logical, doesn’t it? One policy, one payment, everyone covered. Easy. Convenient. Until you actually start doing the maths. In reality, the idea of putting everyone under one policy roof is often far from cost-effective. And in some cases, it can lead to unnecessary expenses, renewal complications, and a few nasty surprises when it comes to claims. Let’s break down when a family plan makes sense — and when it really, really doesn’t.
Myth #1: “One policy for all = cheaper”
Not necessarily. In the world of International Private Medical Insurance (IPMI), true family discounts are rare. Yes, some insurers dangle a 10–15% discount to make the family plan seem appealing — but that’s usually a one-time carrot. By the time renewal comes around, it disappears. And if you’ve had any significant claims during that first year, switching providers becomes complicated. Because exclusions will most likely be applied.
That’s not to say family plans never work. If your children are still in school or studying at university in the UK, insurers will often apply a “dependant rate”, which is noticeably cheaper than a “young adult” rate for somebody exactly the same age.
But even then, it’s often much easier and smarter to split - one child attached to each parent and once they’re grown, set them up with their own policy. Simple and efficient.
Myth #2: “If one family member has higher claims, that’s fine — we’re all covered”
And this is the biggest trap of all. Let’s take a simple example:
Daughter - barely uses the policy.
Dad - goes in for the occasional check-up or physio session.
Mum - treats the policy like an open bar. Every ache, scan and specialist visit is on the list.
Now, IPMI policies are usually community-rated. That means your claims technically shouldn’t affect your premium. But here’s the industry’s “unofficial” reality - if your claims exceed 100% of what you paid for two years in a row, then most insurers will quietly add claim adjustment to your renewal. And since the policy is shared, that uplift applies to everyone on the plan. Even the ones who didn’t use it.
Myth #3: “Let’s include the grandparents and aunties too — keep the whole family under one roof”
Nope. Doesn’t work like that. Insurers generally only allow immediate family members (i.e. partners and children) to be on the same policy. Extended relatives? Separate plan.
And if they’re over 60, underwriting will likely be different — and premiums will certainly reflect that.
Myth #4: “Let’s keep everyone on the same level of cover — makes life simpler”
Sure, it’s simpler. But also… expensive and unnecessary. Take a common case:
The wife wants to include private maternity coverage. The husband, understandably, doesn’t quite need it. Maternity-inclusive policies often cost 30–40% more than standard ones.
So if everyone’s on the same level of cover — even those who’ll never use maternity — the price goes up dramatically. Why pay for something you’ll never touch?
This is the equivalent of buying a family gym membership where everyone’s forced into kickboxing classes. And all you wanted was the pool.
Split the policy. Tailor the cover. Save money. It’s that simple.
So what’s the right move?
Before buying any policy, whether its family or not, ask yourself:
• Why are you getting this cover?
• How will you actually use it?
• What’s changing in the next year or two?
• Are you planning to have children?
• Are your kids moving abroad for uni?
• Does one partner almost never use medical services?
A family plan isn’t inherently “better.” Sometimes it’s the right tool. Sometimes it’s a costly mistake, wrapped in a bit of marketing spin. Structure your policy around your reality, not assumptions and definitely not around what sounds convenient on paper.