Why is your corporate medical insurance not sufficient


20 May 2023

Understand limitations, gaps, and potential risks to ensure comprehensive healthcare coverage for you and your employees.

When working in a company, employees receive many financial as well as non-financial benefits from their employers. One of these perks is group health insurance. In some companies, health insurance coverage is limited only to the employee, whereas some may extend it to the families of the employees. 

However, you may wonder if the coverage offered by your company is enough for both you and your family. Let's understand it in detail. 

What is a corporate health insurance policy?

Also known as group health insurance plans, it offers coverage for a group of employees at a company. A company often provides group health insurance as a benefit to its employees, with the company paying for the cost of the insurance coverage. 

Many corporate insurance policies offer family coverage, but this coverage is often not enough to adequately protect families from the high cost of medical expenses. For example, a coverage limits of Rs 2 to 4 lacs for a family of four may seem like a lot, but with today's skyrocketing medical costs, this coverage is often not enough to cover the cost of a family hospitalization. 

Additionally, this type of coverage may not be sufficient for individuals who are in the transition phase of their lives, such as those who have recently lost their jobs or retired and who may be at a higher risk of experiencing a medical emergency. These reasons, among others, highlight the limitations of corporate insurance policies and the importance of considering other options for health coverage. 

Mentioned below are some reasons why corporate health insurance isn't sufficient:

  • Less sum insured: Many corporate insurance plans do not offer enough coverage to protect individuals and families from the financial burden of a medical emergency. Additionally, corporate health policies typically do not allow individuals to adjust their coverage amounts to suit their personal needs.

  • Post-retirement coverage: As we all eventually reach retirement age, it is crucial to plan for the potential cost of medical expenses once our income stops. After retirement, obtaining a health insurance policy can become more difficult and costlier, particularly if insurers perceive the individual as high-risk.

  • Changes in employee policy - If, due to reasons like cost-cutting, your employer takes away the corporate insurance policy, you would be left without any of the health insurance plans, which can be risky.

  • Losing your job - When you lose or switch your job, your health insurance policy will also come to an end. If there's a gap between your old and new job, you would not be protected by health insurance meanwhile. Thus, having individual health insurance can be beneficial during such times.

  • Inflexibility - Corporate insurance policies may not provide coverage for all members of an individual's family, which highlights the fact that employers are the ones who negotiate the terms of group policies with insurers.

While corporate health insurance coverage is a benefit, it is essential to have an individual health plan as well for better safety aspects in case of costly medical emergencies.

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The content of this blog has been created and carefully reviewed by the esteemed team at Kotak General Insurance, with the sole purpose of providing valuable guidance and sharing insights on the importance of general insurance. Our objective is to assist users in making informed decisions when purchasing or renewing insurance policies for their cars, bikes, and health. Our expertly curated information aims to empower our readers with the knowledge they need to protect their valuable assets and financial interests.