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Is your company’s group insurance enough for you? Do you need personal health insurance?

Written by - Rudri Rawell

July 12, 2022 6 minutes

Having secured employment in these days of uncertainty is as crucial as having a roof on our heads. The benefits of having secured employment apart from a steady income include having health insurance as well. The recent pandemic has shown us the importance of having a good health insurance plan so we can have a buffer for the rising medical expenses and can get timely medical assistance. 

As per the revised rules of the government, all companies are required to provide health insurance benefits to their employees. But is it really enough? Is it really worth having just a basic group health insurance plan and not an individual one? 

All these questions and related details of group health insurance are discussed hereunder. 

What is group health insurance?

Before assessing if group health insurance is enough to meet all the medical needs, let us first understand its basic meaning. A group health insurance is also often known as a corporate health insurance plan. This is a standard health care plan that is provided by employers for a group of employees in their organization. It is referred to as a standard health care plan as it cannot be tailored to the individual healthcare needs of each employee.

The coverage offered under the plan is also basic (usually Rs. 5,00,000 or as set by the company) and may or may not include all the family members. Certain corporate health care plans also have many restrictions with regards to clauses like a ceiling on maximum room rent, consumables, etc. These restrictions often make group health care plans insufficient to meet all the needs of the employees. 

Why do you need personal health insurance apart from group health insurance? 

From the above meaning of a group health insurance plan, we can understand that while it is necessary to have one, it is also insufficient. Therefore, it is necessary to have an additional individual health cover so all the medical needs of a person and their family are met. The importance of having an individual health care plan is highlighted in the following points. 

  1. Insurance available until employment 

A group health insurance plan is available to all the employees of the group. However, the validity of the plan is conditional and is available till employment exists. Once the employment of the employee is terminated or when they resign, the validity of the group health plan is also terminated and they will not be able to avail its benefits anymore. Therefore, at such times, having a personal health insurance plan becomes quite necessary.

  1. Limited coverage 

Most organizations offer pretty basic and standard group health insurance plans. The coverage offered by these plans is quite limited and quite often insufficient in the face of the rising medical costs. An individual health care plan can meet the additional needs of the individual and their family and provide optimum medical attention.

  1. May or may not include family members 

Some group health insurance plans include only the employee and not their family members. This limits the coverage under the group health insurance plan and does not benefit the immediate family members, especially the senior citizen parents of the individual. A need for an individual health care plan is enhanced in such cases as medical costs for senior citizens are quite expensive in our country. 

  1. Varied healthcare needs 

One of the biggest disadvantages of a group health insurance plan is the standardized plan offered to all the employees. This standard cover cannot be customized to cater to the individual needs of every employee. In such scenarios, an individual health care plan will make it easier for the employees to meet the individual needs of themselves and their family members. 

  1. Multiple restrictive clauses 

A group health insurance plan has multiple restrictions in terms of the coverage amount available, the hospital where the employee can get medical attention, availability of cashless treatment or not, the ceiling on room rent limit, use of consumables, the inclusion of family members or not, etc. Such restrictions reduce the effectiveness of a health insurance plan and do not serve its true purpose. Therefore, an individual health care plan is essential. 

  1. Lack of tax benefits

One of the prime benefits of a health insurance plan apart from timely and quality medical attention is the tax deduction under section 80D of the Income Tax Act. However, a group health insurance plan does not provide this benefit to the employees. Therefore, along with additional coverage, an individual health care plan provides tax benefits as well between Rs. 25,000 up to a maximum of Rs. 1,00,000 (depending on the age of the insured person and their family members). 

  1. Costlier to get health insurance post-retirement

The medical costs in our country are constantly on a rise. Especially in the case of senior citizens, the need for medical attention increases thereby increasing the medical costs. Till the time a person is employed, such expenses are covered under the group health care plan. However, upon retirement, if a person does not have their individual health insurance, buying a new health insurance plan at such time will be a costly affair. Hence, it is essential to get a health insurance plan well before retirement to ensure that every person has adequate health insurance even in their retirement and at manageable costs. 


Group health insurance is beneficial for every employee of the group as it provides them with basic health insurance, especially for young employees who have just started their careers. It provides them with peace of mind and a financial backup in case of any medical emergency. But it is not sufficient and does not meet all the requirements of a person and their family. Therefore, an individual health insurance plan is crucial for every person despite having a group health insurance plan.


Is customization possible in group health insurance plans?

No. It is not possible to have customization in a group health insurance plan.

 What is the usual coverage under group health insurance?

The usual coverage under a group health insurance plan is usually Rs. 5,00,000 as provided by most organizations.

Can an employee convert group health insurance into an individual health plan?

Yes. Upon leaving the organization, the employee may opt to convert the group health insurance plan into an individual health care plan.

 Does group health insurance provide tax benefits?

No. There are no tax benefits under the group health insurance plans in the form of deductions under section 80D.

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