An individual health policy sets aside a dedicated sum insured for one person. If they claim heavily in a year, the cover for everyone else in the family (if they hold separate individual policies) is unaffected.
A family floater covers everyone under one shared sum insured, usually at a lower combined premium than separate individual policies for the same amount. The risk: if one family member has a major claim, the remaining cover available for the rest of the family for that year shrinks.
A common middle path is a family floater sized generously for routine risk, topped up with a super top-up policy for a large, unexpected claim — worth discussing against your family’s age profile and any existing conditions.