Most companies buy group health insurance because HR requires it — not because it actually protects employees. Here are the gaps I find in nearly every corporate policy I review.
The sum insured is almost always too low
The standard group policy offers ₹2–5 lakh per employee. In 2026, a single hospitalisation at a private hospital in any Indian metro can easily exceed ₹3–4 lakh. ICU stays, cardiac events, and cancer treatment regularly run into ₹10–30 lakh. A ₹3 lakh cover is better than nothing — but employees often don't realise it can be exhausted in a single event, leaving them personally liable for the rest.
A better approach: a base group policy of ₹5 lakh plus a super top-up at the group level, or allowing employees to top up their own cover individually (voluntary top-up). Many insurers offer this as an add-on to group policies at very competitive rates because the group spreads the risk.
Dependent cover is limited or absent
Many group policies cover employees only — or cover spouse and children but exclude parents. Given that many Indian employees are primary caregivers for ageing parents, this is a significant gap. Senior citizen health insurance on the open market is expensive and comes with significant exclusions. Adding parents to a group policy, even as an optional paid top-up, is often far more affordable and has fewer exclusions than individual senior citizen policies.
Pre-existing conditions are usually covered — but employees don't know it
One of the major advantages of group insurance over individual policies is that most group policies cover pre-existing conditions from day one — no waiting period. This is a significant benefit that HR teams routinely fail to communicate. Employees with diabetes, hypertension, or other chronic conditions often assume their group policy excludes them, and may buy additional individual policies unnecessarily.
Make sure your employees know what they're covered for. A benefits communication exercise — even a single email or one-pager — pays dividends in employee satisfaction and trust.
Maternity cover is either absent or under-specified
Group policies that include maternity cover often have sub-limits (₹25,000–50,000) that haven't kept pace with actual delivery costs, which now run ₹60,000–2,50,000 depending on city and hospital. The sub-limit is often not communicated clearly, leading to surprised employees at the billing counter.
The claims process is unclear
In many companies, the claims process involves HR forwarding paperwork to an insurer or TPA — with no dedicated person tracking claim status or advocating for employees whose claims are delayed or disputed. Employees navigate this alone during already stressful hospitalisation events. This is the single biggest employee satisfaction issue in corporate health insurance.
Designating a clear point of contact — whether internal or through an advisor — for claims support dramatically improves employee experience and actually reduces the number of disputed claims, because documentation is handled correctly upfront.
What good corporate health insurance looks like
Sum insured of ₹10 lakh+ per employee (with top-up options), coverage for dependents including parents, pre-existing condition coverage communicated clearly, maternity sub-limits that reflect actual costs, and a named person or advisor employees can call when they're hospitalised. It costs more than the minimum — but the difference in employee retention and satisfaction is measurable.