Most salaried employees in India receive group health insurance coverage from their employers. It feels like a bonus—one less thing to worry about. But here’s a critical question: Is it wise to depend only on your company’s group health insurance? The simple answer is no.
While group health policies offer a layer of protection, they are not enough in the long run. Life changes, and so do jobs, employers, and health conditions. You need coverage that is stable, customisable, and stays with you. That’s where individual health insurance comes in.
In this article, we’ll explain in clear and straightforward terms why every employee should consider buying an individual health plan even if they already have group coverage from their employer.
Understanding Group Health Insurance
Group health insurance is a policy that an employer provides to its employees. The company negotiates this insurance with a provider, and it usually covers the employee and sometimes their immediate family. The coverage amount ranges from Rs. 2 lakh to Rs. 5 lakh, depending on the company’s policy.
Advantages of group health insurance:
- Immediate coverage without medical tests
- Often includes maternity, pre-existing diseases, and day-care procedures
- Covers spouses, children, and sometimes parents
- Premiums are paid or subsidised by the employer
It’s a helpful benefit and works well when you are in good health and employed with the company. But what happens if you leave the job?
The Temporary Nature of Group Health Insurance
The most significant limitation of group health insurance is that it ends with your employment. The day you resign, retire, or your company shut down or changes policy, your health insurance vanishes.
Now imagine this: You’re 45, have worked in a company for 15 years, and suddenly lose your job or retire early. If you haven’t bought any individual cover, you’re left without health protection at a time when you’re more vulnerable to illness.
Applying for a new health plan at that age could mean:
- Higher premiums
- Medical tests
- Waiting periods
- Exclusion of certain illnesses
This situation creates both financial and emotional stress.
Medical Inflation and Coverage Gaps
Medical costs in India are rising at an average rate of 12% to 14% per year. A minor surgery that cost Rs. 1 lakh five years ago can now cost Rs. 2 to Rs. 3 lakh. A Rs. 3 lakh group policy might not even cover a single hospitalisation.
Also, most group policies have limits on room rent and disease caps and may not cover modern treatments like robotic surgery or new-age cancer care. This leaves the employee exposed to heavy out-of-pocket expenses.
Having an individual policy helps fill this gap. You can choose the sum insured, top-up covers, and add-ons like critical illness, maternity, or daily hospital cash.
Switching Jobs Can Leave You Uncovered
During job transitions, there can be a gap in health insurance coverage. Not all companies provide group health insurance, and even if they do, there could be waiting periods for some illnesses. If you fall sick or have an accident during this period, you’ll have to bear all the costs.
Also, startups, freelancers, and gig workers don’t always offer health coverage. If you plan to switch to freelancing or entrepreneurship, you need a policy that stays with you, not your employer.
You May Not Get Family Coverage in New Jobs
Some group health policies only cover the employee, not their spouse, children, or parents. Even if they are covered, the coverage amount may not be enough.
For instance, a Rs. 3 lakh floater sum insured for a family of four may get exhausted in one hospitalisation. If your child needs surgery and you have already used part of the cover, you’ll have to pay the rest.
By buying an individual family floater policy, you ensure your family stays protected regardless of your job status or company benefits.
Tax Benefits with Individual Health Insurance
Health insurance also helps save tax under Section 80D of the Income Tax Act. You can claim:
- Up to Rs. 25,000 for premium paid for self, spouse, and children
- Additional Rs. 25,000 to Rs. 50,000 for senior citizen parents
So, even if you have group coverage, buying an individual policy gives you financial and tax benefits.
What Happens Post-Retirement?
Once you retire, group insurance ends, and if you are 60 or above, getting a new policy becomes tough. Even if you manage to get one, it will be expensive and may come with strict terms.
If you buy an individual plan early in life (preferably in your 20s or 30s), you can lock in:
- Lower premium rates
- Continued policy renewals till lifetime
- No-claim bonus benefits
- Shorter waiting periods for pre-existing conditions
Also, some insurers offer restoration benefits, which recharge your sum insured if it gets used up in a policy year. This feature can be a lifesaver in case of back-to-back claims.
Individual Policy Gives Better Control and Customisation
When you buy your health plan, you can customise it as per your needs. For example:
- Add maternity or fertility cover
- Opt for a room rent waiver
- Include AYUSH treatments
- Choose cashless hospitals in your preferred city
Group health plans are standardised, while individual plans offer flexibility and long-term continuity. You can even port your policy to another insurer if you’re not happy with the services, which is not possible in group insurance.
Build a Health Insurance Ladder: Combine Both Policies
The best approach is to use both group and individual health insurance together. The group cover helps in the short term—especially for smaller hospital expenses—while the individual cover acts as a long-term financial safety net.
You can also consider super top-up policies that offer a higher sum insured at a lower premium after a deductible is met. These work well when combined with your base individual health cover.
This strategy ensures:
- Continued coverage
- Protection during a job change
- Shield from big hospital bills
- Peace of mind for you and your family
Final Thoughts: Buy Early and Stay Insured Always
Waiting to fall sick or leave your job to buy an individual plan is a bad financial decision. Health insurance should be planned, not rushed.
The right time to buy a personal policy is now when you are young, healthy, and employed. Not only will you get a lower premium, but you’ll also avoid last-minute stress, rejections, or exclusions.
Company health coverage is a benefit. But it’s not a permanent solution. Your health deserves long-term, uninterrupted protection. An individual health insurance policy ensures that you’re prepared, no matter where life or career takes you.
Disclaimer: Health insurance policies are subject to terms, conditions, and exclusions. Always read policy documents and consult with certified advisors before purchasing.
