Category: Health and Life Insurance

Group Health Cover- Advantages and Disadvantages

Ria whose father was suffering from cataract, who was covered under Group Insurance Policy, was  surprised to know that just the part of cataract operation would be covered under insurance, and rest has to be paid by the individual. Many of the individuals face similar kind of situations. Are you the one?

Then read our post to get the insights of how a group health cover helps and when it could be a curse!

 What is Group Health Cover?

Investopedia defines Group Life Insurance as “Life insurance offered by an employer or large-scale entity (i.e. association or labor organization) to its workers or members. Group life insurance is typically offered as a piece of a larger employee or membership benefits package. By purchasing coverage through a provider on a ‘wholesale’ basis for its members, the coverage costs each worker/member much less than if they had to purchase an individual policy. It is a PERK not a RIGHT!

Group health insurance from your employer – Is it enough?

As per a study done by TowerWatson one of the primary reasons for employers offering “Group Health Insurance “ is Attraction and Retention of the employees. However, due to challenges like an increase in medical costs due to inflation or more advanced technology-driven treatments, we do see a change in how the policies are rolled out. In fact to support the above argument a report by ICICI Lombard narrates 76 per cent of companies are adopting co-pay and room rent limits. That means that although an individual [and his dependants] are covered under the policy, still only a part payment would be made by them, the rest has to bear by the individual himself.

So it is crucial to study the insurance policies offered by your employer and then decide if is it enough or you need to buy an individual policy?

Four benefits of group health cover from employer

  1. No Pre-Test – Usually when an individual buys a health cover he and his dependants may need to undergo a medical test, however with group policy it is not needed.You are covered under group health insurance from your employer from day one who get the policy papers in your hand.
  2. Avail Maternity Benefits – With group policies, an individual could also avail maternity benefits that may not be possible with individual health insurance covers unless you opt for a rider and pay the extra
  3. Low in Cost – The group policies are offered at a discounted price and at times could be almost 30-40 % cheaper when compared to individual health insurance covers.
  4. Covers Pre-Existing Diseases – Under group policy cover you may also get claims for a pre-existing disease that too from day one, that is not possible with an individual health cover.

Buy health insurance policy even if you have employee group coverage

Even though you[and your dependants] are covered with a good amount of the group health cover, but experts recommend to buy an individual health policy because –

  1. The cover could only protect you if you are an employee, however, if you quit or leave the company, , the benefit would no longer be there to protect you.
  2. As a result of change in firms HR policy, the company may no longer wish to provide you with the health cover, in such case, individual health policy may be handy
  3. Group health cover may not include all your dependants’ example – it may cover you and your spouse, leaving your kids and parents. Remember companies’ prime motive is to offer a perk at a minimal cost; hence they are not obliged to cover all your dependants.
  4. With the change of employment, you may not get the same benefits as your previous companies group policy used to offer you, hence individual health policies could help you from getting into such situations.
  5. No Customization and future planning are available with group health covers. An individual has to take the policy as is offered as the employers do not entertain customization. This is because most company health plans are structured as group health benefits.
  6. The group policies do not extend post retirement. After your retirement[that means no current job], which is when you’ll need insurance coverage the most, you will not have the benefit of insurance cover. Getting a policy after the age of 50 is an extremely arduous task, and requires medical tests to be undertaken, no coverage for “pre-existing medical conditions.” Getting an individual insurance cover in your younger days, which extends beyond your retirement age, is fair
  7. Group health cover policies do not have much It’s likely that the total coverage (if all terms and conditions are met) could be up to Rs.1,50,000 or Rs.2,00,000 (if you’re lucky). For serious illnesses and long hospitalizations, this amount will hardly be 20% – 30% of the total expenditure.

 Health insurance should be made mandatory

With an insight to pros and cons of the group and individual health policy, at the end of the day, it’s an individual responsibility to take care of his health. With no health cover after retirement, no inclusion of dependents and limiting the assured amount, even the group health policies are now not of much help. The Indian government that can make a mandate of “vehicle insurance” why do we not have the health insurance made as a mandate? Here are the reasons why each in India would benefit from health insurance-

  • Each day health sector is advancing in a way of how operations and surgeries or even consultation could be done. For such treatment, when one is backed up with a proper health insurance we could see best of healthcare at people’s reach.
  • Reducing Pressure on individual – When a loved one is diagnosed with a problem, we try to spend whatever we could to assure him/her the best of services. With insurance, the pinch on pocket could be reduced and save the individual’s life as well as from financial turmoil.

 We hope we have answered your queries on the advantages and disadvantages offered by Group Health insurance policies. If you still have any unanswered questions or need help, feel free to contact us here.

We would be glad to help you with your planning and investment related decisions.


  –Samiksha Seth

Content Strategist Dilzer Consultants Pvt Ltd.