The Limitations of Corporate Health Insurance
Many salaried professionals in India assume that their employer-provided 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.
health insurance policy to ensure long-term financial protection.
“Genuinely surprised by how many people have never bought a personal health insurance 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 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.
In conclusion, while corporate health insurance may provide some level of protection, it is essential for individuals to consider purchasing a personal health insurance policy to ensure adequate coverage and financial protection. With medical inflation on the rise, it is crucial to have a comprehensive health insurance plan in place to avoid financial hardship in the event of a medical emergency.