Why Should You opt for Individual Health Insurance Apart from Employer Insurance?


One of the most common corporate benefits offered to employees in India is health insurance coverage. It proves beneficial for both the employees and employers. While the employees get financial protection against medical expenses, the employers win over their loyalty and have better chances of retaining them for a more extended period.

However, as an employee, you must know that employer insurance has certain limitations. First and foremost, the insurance cover remains valid only until you stay employed with a specific company. Second, the insurance cover of such policies is often small and insufficient to cover the entire medical expenses, especially if you are diagnosed with a terminal illness. In such a situation, you must settle the bills from your pocket.

If you don’t have sufficient savings, managing these unexpected expenses can be challenging. To avoid such an unpleasant situation, it is best advised to opt for an individual health insurance policy even if you have employer health insurance.

Let us look at the reasons why buying individual health insurance is a sensible idea.

  • Not enough coverage for all

The insurance companies draft the employer health insurance or a group health insurance policy only to cover the most common illness and the associated treatments. Sometimes they can also provide coverage against specific occupational risks that are exclusive to that industry or organisation. However, such health insurance plans do not cover many severe ailments that the employees and their families may get affected by. One such common and vital exclusion is terminal illness and surgeries.

  • Insufficient coverage for hospitalisation expenses

A group health insurance, as discussed, has a limited coverage scope and amount. This means such plans may not cover 100% of the hospitalisation expenses you may incur during your hospitalisation. Suppose you are admitted to the ICU (Intensive Care Unit) or need any specific treatment for your recovery. In that case, if the same is not listed under the insurance policy’s coverage, the insurer will not pay for the same. This means you must cover such expenses from your pocket.

Also, most group health insurance or employer health insurance have sub-limits. For example, the policy may cover only 60% of the bed charges. In this case, suppose the hospital charges Rs. 1000 for bed charges, the insurance will cover only Rs. 600 and you must pay the rest.

  • Coverage for a limited period only

You can enjoy the benefits of group health insurance only till you are part of the organisation that provides the cover. If you quit your job or move to a different organisation, these plans get terminated automatically. In such a situation, you may be left without insurance coverage.

  • No scope for tax benefit

One of the most common concerns that employees have is ‘are they eligible to get tax benefits on employer health insurance?’ The answer is NO. This means even while the premium for the health cover is deducted from your salary, you do not get tax benefits.

  • No maternity coverage

While the employer health insurance policy may provide coverage against common ailments, most plans do not cover maternity expenses. This is a huge drawback of employer insurance. So, if you are a woman, your employer health insurance policy may not cover the maternity-related hospital bills. You must have a separate maternity insurance policy to take care of the expenses.

Final Word

Now that you are aware of the various drawbacks of a group health insurance policy, it is better to get an individual health cover for you and your family so that everyone can remain protected against medical expenses at all times.