A friend called to ask…tell me precisely what can go wrong in a group policy:

1. First of all you are dependent on your employer. That does not sound too great, does it?

2. Your employer could just do away with medical insurance completely. Period.

3. Suddenly your parents could be excluded – and if they are above 65 you will struggle getting them medical insurance AT ALL.

4. Your employer could exclude your spouse and children (do not look horrified, it happens far more regularly than you wish to accept).

5. What happens if you have quit a job on Friday, decided to join on the coming Wednesday, but your heart decides to attack you on Monday? Remember between jobs you will have no insurance.

6. If you lose your job – and you are perhaps most vulnerable, you lose your insurance too. When you have just lost your job, the chances are insurance premium is NOT likely to be your topmost priority.

7. The waiting period for your spouse and children could be different from the waiting period for you. This means your wife may be without cover for say 3 years because you have changed your job.

8. If you move from a large company (say 15000 employees) to a small company (say 700 employees) – which could suddenly see a reduction in coverage amount.

9. Rarely, if at all, do companies increase the sum assured to cover INFLATION.

10. Many companies take medical insurance without realising the impact of non payment of claim.

…10 points per post!!

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  1. I have gone through point 5 around 8 years back, had just 3 days gap between jobs & landed in hospital in Gujarat during the floods there

  2. while all this makes so much sense, why is group mediclaim existing at all? hr sees it as a pain, mgmt sees it as a liability & i hardly see any employees claiming that they use this as a decision making parameter. does it not make sense to abolish such grouping based products altogether? after all, no company provided a group car insurance for its senior staff!

  3. Subra Sir,

    Now a days employers also ask employees to pay 25% of premium. Moreover they also have a 20% copay on claims done for parents.


  4. “employers also ask employees” – i think it is the insurance policy that is worded that way, it is not an employer decision (of course they decided to sign up such a group policy in the first place)

  5. Hi subra,

    how to narrow down to a particular health insurance? any post on this? or do you have any particular product in mind?

    Pls help.

    Do you think a normal man will be able to select out a health insurance among this crowds?


  6. Its an additional offer from the employer. During initial discussion they would say to you have been covered for 4 lahh in “our” group insurance. It will be only in paper and you will ended upo without even an ID card. It will be an ADDITIONAL pain during claims. You might be happy with your physical suffering than with your insuranc claims.

  7. New India assurance and some others dont seem to have the option to buy online – this is cumbersome. My bank seems to offer a plan with Royal Sundaram – should I go for it? how about icici lombard or tata aig?

  8. Hi Subra,

    I read your articles on disadvantage of having group insurance from company. I realized it is true and got a personal medi-claim policy for me.

    Now the problem is, my father is a senior-citizen and it is very costly to have medi-claim policy from private insurers as it is too costly OR from PSU companies either they are not accepting senior-citizens/it is also costly.

    I came to know about Bancassurance and some banks are offering group insurance with affordable rates. So I opened account with one such bank and covered both my parents. So I believe there is little risk in getting group insurance from bank than from my employer (As long as my parents are bank customers, they can have insurance cover).

    Also I think there is very little chance that bank can discontinue this option (as the whole premium is paid by the customers directly, and also bank is getting commission for it).

    Do you see any caveat here ? Would love to hear your views …. delighted to see a separate post on this 😉

    Thanks and Regards,
    Shankarraju S

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