Zerodha's Nithin Kamath warns corporate health insurance may not be enough — here's why

Many salaried professionals assume that employer-sponsored health insurance is sufficient to cover medical emergencies. However, experts warn that a corporate plan may not be enough.

Health insurance plans provided by employers may come with some limitations, such as coverage caps, restrictions on certain treatments, and the risk of losing the policy when you switch jobs. These gaps mean employees may find themselves underinsured during critical situations.

Highlighting this concern, Nithin Kamath recently urged individuals not to rely solely on employer-provided coverage. The Zerodha co-founder stressed the importance of purchasing an independent health insurance policy to ensure long-term financial protection.

“Genuinely surprised by how many people have never bought a personal health policy because they assume their employer's group cover is enough. Most employer plans are negotiated on cost, not comprehensiveness.,” Kamath wrote on X (formerly Twitter).

Hidden limits in corporate coverage

Kamath also highlighted a common issue with employer health insurance: sub-limits. These may cap room rent, thereby indirectly reducing other reimbursements such as surgeon fees, procedure charges, and hospital expenses. As a result, the final claim amount may be much lower than what was expected.

“Room rent sub-limits, for example, don't just cap the room cost; they proportionally reduce surgeon fees, procedure costs, and everything else in the claim,” Kamath said on X.

Why the corporate coverage may not be enough

According to Kamath, a cover of ₹5–10 lakh may seem adequate in the early years of a career, but the same amount may fall short later, especially given that India is estimated to have medical inflation of around 14% annually.

He noted that corporate cover usually remains fixed, while personal policies allow higher coverage and upgrades over time. This becomes important because hospitalisation and medical treatments in metro cities are expensive, with a single surgery costing several lakhs.

“ ₹5–10L sum insured feels fine at 26. With medical inflation running at ~14% annually in India, it really isn't at 36. Corporate cover usually stays flat. Personal policies can be upgraded,” Kamath said.

No tax benefit

Apart from the other limitations, holders should also know that premiums paid by employees do not qualify for tax deduction.

A personal health insurance policy in your own name, however, allows deductions under Section 80D of the Income Tax Act, reducing the overall cost of protection.

Deductions under Section 80D for medical insurance premiums and preventive health check-ups (up to ₹50,000– ₹1,00,000 depending on age) can only be claimed under the old tax regime.

What people should know?

Kamath also pointed out that relying only on employer-provided insurance can create complications later. He noted that if a person develops a medical condition while covered under a corporate group policy and later attempts to buy an individual health insurance plan, insurers may treat it as a pre-existing condition.

“Someone who bought a personal policy at 25 has already passed the required checks, has 10 years of history, and will probably pay a smaller premium at renewal. Buying a new policy with pre-existing conditions would be a lot more expensive,” he noted.

“Use the corporate cover for claims, keep your personal policy clean and let the no-claim bonus build. But the policy that protects you when it actually matters is the one you own,” he wrote, ending the detailed post.