Is the Coverage under Your Group Health Insurance Policy Really Enough?

Is the Coverage under Your Group Health Insurance Policy Really Enough?

Your company provided insurance is great to get you startedto rely only on it, as it comes with several Terms & Conditions!

Aman and Karan were best friends. They met one Sunday evening to catch up. As they talked about their lives, the topic went to the companies they worked for and the group health insurance policies; they had both availed through their respective companies.

Over the course of the discussion Karan mentioned that he had availed a separate health insurance policy as well. He explained his reasons saying that, while the group policy was great to get started with, it would hardly be enough to cover a serious illness. Moreover, it also didn’t cover his dependents.

Let’s take a look at their conversation.  

Aman: Health care is so expensive these days. I am glad that I am covered under the health insurance plan provided by my company.

Karan: Yeah you’re right. Healthcare costs are definitely sky high! And it certainly is good to be covered. But, an inadequate cover that doesn’t take care of all your health care costs can derail the financial stability of your family. That is why I decided to get myself a separate health insurance policy, and not be solely dependent on the group cover provided by my company.

Aman: Hmm, but I am covered for Rs. 5 lakhs. I think that’s a pretty good amount, don’t you?

Karan: Yes, its a good amount, but is it enough? You know that health care is already pretty expensive. And God forbid, if you were to be diagnosed with a critical illness like cancer, for which treatment costs are so expensive and run into lakhs What will you do then? The rest of the cost you’d have to shell out of your savings, leaving you with nothing.

Moreover, most company health insurance plans have co-pay clauses, which mean that the employer will only cover a part of the total expenditure and the employee has to bear the rest. So you see, the coverage under group plans is simply not enough. Besides what about you dependents? Does your plan cover them?

Aman: Well, no. But, wouldn’t investing in a separate health care policy be an added cost?

Karan: Well, that depends on how you look at it. An individual policy would provide a larger cover and there are so many other advantages as well, the biggest being the peace of mind you get in knowing that you and your dependents will be taken care of (financially at least) in case you are hospitalized.

Take a look at this table, that showcases the difference between both the policies

Group Policy

Standalone Health Policy

The coverage you enjoy now is applicable only till the time you are employed with the company. When you retire or age, quit or switch jobs, you are no longer covered. Even between jobs, you are at risk.

You can convert the plan into an individual policy, but that would warrant a much higher premium.

A stand-alone health policy covers you irrespective of your employment status, till the time you pay your premiums, just like a life insurance plan.

Generally, employers negotiate on almost all aspects of group cover including the number of dependents, critical ailments, riders, and the maximum sum insured.

Hence, you can't always ensure that critical illnesses or surgeries performed would be covered.

Also, most group plans don’t cover extended hospitalization, due to their limited cover.

A dedicated health plan allows you to customize your policy. You can choose the sum assured, the number of dependents, and add relevant riders.

You also have the provision to cover extended hospitalization in a standalone health policy, which is absent in a group plan.

In a group policy, if you don't make a claim throughout the policy tenure, you don't get any benefit.

When you have a stand-alone health insurance plan, if you don't make a claim during the policy tenure, you become eligible for a No Claim Bonus, the benefits of which can be enjoyed in the form of lower renewal premiums or increase in cover without any extra costs.

Since it’s a shared cover, if any other individual makes a claim with your employer, not willing to pay more premiums on the group’s behalf, the overall coverage reduces drastically.

There is no such restriction in a personal health policy. Here, you have all the freedom and flexibility and can customize your plan according to your needs.

Group plan coverage doesn’t grow with age but only with designation.

You can easily alter your coverage based on your preference, medical history, and financial situation.


Aman: Wow, that was really informative. Thanks a lot! I’m definitely going to get myself a dedicated health care policy as soon as possible.

Karan: Anytime my friend. I’m glad I could help!

A week after meeting with Karan, Aman purchased a dedicated health care policy for himself and his family.

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