Home >Money >Personal Finance >It is prudent to supplement employer medical coverage

This is the time of the year when companies typically offer employees a chance to review their health insurance coverage. Mostly, employers ask you to add or remove any family member from the group health policy.

On the other hand, some employers might even offer additional benefits that can help cover some of the unexpected costs not covered under a specific employer’s health insurance plan.

It is quite a hassle-free way to have health insurance at an affordable premium where not only the employee but also their spouse, children and dependent parents are covered.

But you could lose your job or it could be that you get a job, but the employer doesn’t provide you with health insurance immediately. Hence, group health insurance provided by an employer can have many gaps.


First, employer cover is there only as long as you are employed.

Nikhil Apte, chief product officer - product factory (health insurance), Royal Sundaram General Insurance, said that people take breaks in between employment. During that time if something happens, there is no employer cover available for them. Moreover, when you retire or leave the job, your cover ends abruptly and at that time if you develop any health condition such as diabetes, hypertension or thyroid, etc., you won’t be covered.

“Several employees try to buy retail health policies at the time of retirement when they are in the late 50s and by that time most people have diabetes, hypertension, etc., and they are subjected to restrictions, rejections, loadings or co-pays," said Apte.


Second, the sum insured is never decided by you; it is decided by the employer. It’s typically decided on the basis of your seniority, grade, years of service in the organization, etc.

Aatur Thakkar, co-founder and director, Alliance Insurance Brokers, said, “Though group health policies have very extensive coverage, the coverage depends on the corporate philosophy towards employee benefits. The sum insured given by corporates is on an average 2 lakh for lower to middle-grade employees and 4-5 lakh at a higher level, floating over a family of self, spouse and children and at times with parents, which is not adequate at all."

Added Amit Chhabra, head - health insurance, “Furthermore, suppose the company is going through a financial hardship, they might shrink the insurance coverage, putting you in a worrisome situation."


Third, the sub-limits in the employer cover can lower your claim amount. A sub-limit is a monetary cap that your insurer puts on the expenses for some medical procedures.

“There are various sub-limits or caps that come with employee insurance, which might not be able to give you 100% financial security for your medical needs. Moreover, an employer’s cover doesn’t handle the charges or may have a limited part allotted to deal with critical illnesses, accidental cases or untimely demise or domiciliary hospitalization," said Naval Goel, founder and chief executive officer,, an insurance comparison portal.


Fourth, typically in India, a person can have employment up to the age of 60 years. But there is a life beyond 60 years. So, an employer cover is just not sufficient for your entire lifetime.

If you find an individual health policy for post-retirement years, you will have to deal with waiting periods, exclusions on any pre-existing illnesses and sub-limits on certain procedures.

Hence, looking at the rising healthcare costs and longevity, it is important to have separate health insurance coverage at an early age.

Therefore, irrespective of employer cover, you should choose sufficient cover through a retail health policy so that you can get access to healthcare when your family needs it the most.


“The insurance coverage offered by an employer to employees should be considered merely as a perk instead of a fallback option that is given as an employee benefit, which may vary depending upon the company’s financial condition," said Goel.

Nonetheless, Apte said, “If you have employer cover, good; it will ensure that you are insured during the employment years. This way, your sum insured under the retail policy will increase due to the no-claim bonus (NCB) as you would cover your claims from your employer’s policy. So, you must use your employer’s policy as ‘NCB protector’ of your retail policy. Hence, one should view retail cover independently as it is for a lifetime."

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