Is my corporate health insurance good enough?

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How does Corporate Health Insurance works?

In layman’s words, it is a sort of health insurance policy provided by the employer to its employees. It provides them with the best possible health coverage:

  • In most cases, it covers your spouse and children. Some business health plans, however, include coverage for parents as well.
  • It often gives a lump sum insured amount that covers the cost of hospitalisation in the case of an illness or accident. The hospitalisation should last more than 24 hours.
  • To raise your sum covered, you must pay an additional premium.

Breaking Down Further

Because corporate health insurance is included in our employment contract, we rarely compare its benefits to those of other plans. We seldom do our homework on what we are missing out on.

Employer health plans frequently have a slew of restrictions and limitations that do not exist in an individual or family floater health plan. So, how would you ensure that you are adequately protected?

Let’s weigh the advantages and disadvantages before making a decision.

The Advantages of a Corporate Health Plan:

Waiting Time:

One of the most significant benefits is the elimination of the waiting period. Pre-existing illnesses, some defined medical conditions, and maternity benefits typically have a 2- to 4-year waiting period. In this instance, the employee is covered from the start of the insurance.

Pre-Existing Conditions:

When it comes to business health coverage, most claims are accepted regardless of pre-existing conditions (that you might have before getting insured). Another advantage is that many insurers may deny a claim or coverage or impose a waiting time in such instances. You can always confirm with your employer.

No Medical Exam:

Even for senior citizens, the coverage is provided without a pre-medical screening. Depending on your age and pre-existing medical issues, different health plans may demand a pre-medical test.

The premium is covered:

Your employer pays the premium. Only if you intend to increase the sum assured or supplement it with another health plan will you be required to pay the difference.

The Disadvantages of a Corporate Health Plan

To assist you in making an informed decision, we have described why a corporate health plan may not be adequate and why you may need to supplement it with supplemental coverage.

Amount of Coverage:

The majority of companies’ group medical plans have a limited sum assured amount. The maximum coverage is estimated to be Rs. 5,00,000 (if you are lucky).

And, when we consider the expense of medical treatment in the event of a major sickness, this figure accounts for only 25 to 35 percent of the entire spending. So, why pay out of your own wallet when you have insurance?

Clause of Co-Payment:

It indicates that the policyholder must pay a certain percentage of the medical expenditure. The insurance company will only pay a percentage of the total insured in this situation. For example, the insurer will pay 80 percent of the entire expenses, and you must pay the remaining 20 percent from your bank account, which can be as high as 40 percent in some situations.

Unless you are a senior person, most insurance policies do not have a co-pay clause and allow you to opt out of it (if there is any). You can always choose an individual health plan with no co-pay or a low co-pay.

Room Rent Caps

It is also known as a hospital room rent sublimit. As a result, the permitted room rent maximum is pre-defined in a corporate health plan. And if you choose a room with a higher rate, you must pay the difference.

Policy Duration

Your business health insurance will protect you until you leave the organisation. The policy will be terminated when your job ends. You will be without insurance coverage until you find another job.

Members Who Are Insured

Not all employer-provided health insurance policies cover your dependant family members. It is one of the fundamental flaws of this strategy. The primary point of purchasing a health insurance policy is to protect your loved ones as well as yourself in the event of a hospitalisation. Furthermore, if you rely on your spouse, children, or elderly parents, corporate health coverage may not be appropriate.


Corporate health insurance has several advantages, such as no waiting periods, lower premium costs, and no pre-medical screening, but the amount provided is insufficient to cover the total cost of hospitalisation in India.

If you actually want to plan for your future, you should consider your workplace insurance policy as a backup alternative, coupled with a separate health insurance plan that provides comprehensive coverage based on your medical needs.

Also read: Unicorns: To invest or not to invest?

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