Most salaried employees in India receive group health insurance through their employer and assume it is sufficient. Most discover at some point , usually during a job change, retrenchment, or serious illness that it is not. Understanding the specific limitations of employer group cover and why an individual policy alongside it is almost always wise is one of the most practically useful insurance planning insights for Indian working professionals.
What Group Health Insurance Is
Group health insurance is a single master policy covering all enrolled employees under one corporate contract. The employer pays the premium (fully or partially), the insurer prices the policy for the group rather than individual health histories, and coverage is effective from day one without medical underwriting. These features make group insurance unusually accessible: no waiting periods, no individual health screening, coverage from the first day of employment.
The Four Critical Gaps
Gap 1: Coverage ends when employment ends
The most important limitation. On the last day of employment resignation, retrenchment, or retirement the group policy lapses. If you are 58 years old with hypertension and diabetes when you retire, buying a new individual policy will involve premium loading, waiting periods, and co-pay clauses for your existing conditions. The right time to buy individual cover is when you are young and healthy, not when your employer policy lapses.
Gap 2: Low sum insured
Most corporate group policies cover ₹3–5 lakh per employee and family — adequate for minor hospitalisations but insufficient for serious illness in 2026. A cardiac event, cancer treatment, or ICU stay at a private hospital in a metro city can cost ₹10–30 lakhs. The gap between group policy limit and actual serious illness cost can be financially devastating.
Gap 3: Waiting periods do not port to individual policies
If your employer’s group policy has covered your pre-existing diabetes for 5 years, that history does not transfer to an individual policy when you switch jobs. Individual-to-individual portability preserves waiting period continuity under IRDAI rules; group-to-individual does not. Every individual policy starts its waiting period fresh.
Gap 4: Policy terms controlled by your employer
The employer can change the insurer, reduce the sum insured, or remove benefits at renewal without your consent. In cost-cutting cycles, group health cover limits are commonly reduced. You have no control over the policy that covers you.
The Right Strategy: Use Both
The optimal approach for a salaried employee: keep the group cover for its strengths — day-one coverage, no waiting periods, no underwriting and add an individual policy with a deductible matching the group policy’s limit. A ₹50 lakh individual policy with a ₹5 lakh deductible provides catastrophic protection at a much lower premium than a ₹50 lakh zero-deductible policy. The group policy handles the first ₹5 lakh; the individual policy handles everything above.
When you leave the employer, port the individual policy. The waiting period continuity, accumulated NCB, and claims history all transfer. The supplement becomes your primary cover seamlessly.
The best time to buy an individual health policy is in your 20s or early 30s when you are healthy. Premiums are low, waiting periods are academically relevant, and NCB accumulates rapidly. Waiting until illness or job loss makes it significantly more expensive and complex.
Draco Insurance helps employed professionals evaluate their group cover gaps and structure a complementary individual policy. Visit dracoinsurance.in or call +91 7064106417.
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