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Group Health Insurance: Expectations vs. Reality

Published On Feb 27, 2023 10:20 AM By InsuranceDekho

When talking about extra perks and benefits offered to employees by the organisation, 

Group health insurance policies are standard. But what exactly does it mean? It is financial protection offered by companies and organisations to their employees against medical emergencies that may arise in the future. Although group health insurance might seem like it would be enough to protect the future, it is not. In light of this, let’s discuss the expectations and reality of group health medical coverage. 

Group Health Insurance Expectations vs Reality

What Does Group Health Insurance Mean? 

A group health insurance policy, also known as employee health insurance, is an insurance plan provided by a company or organization to its employees and staff. Your employer will pay the insurance company the premiums for the policy. You may also be eligible for tax advantages on the premiums you pay in addition to having financial security in case of medical emergencies. Furthermore, the employees can cover their family members (parents, spouse, and dependent children) under their group health insurance policy. 

Group Health Insurance: Expectations Vs. Reality

There are a lot of misconceptions regarding group health insurance plans. The discussion below will help you learn some common myths and facts about group health plans. 

Expectation: Group Health Insurance Policy provides lifetime coverage

Reality: One of the biggest misconceptions about group health plans is that they provide lifetime coverage. However, in reality, the coverage is only limited while you are working with the company or organization. As soon as you quit your workplace, the insurance coverage will also be removed. Henceforth, it is wise to get insured under a personal health insurance policy that provides lifetime coverage for both you and your family. 

Expectation: There is no initial waiting period for Group Health Insurance

Reality: The initial waiting period refers to the condition in which the policyholder has to wait for at least 30 days to claim their health insurance policy. Group health insurance policies also have an initial waiting period that can be dismissed upon the request of the customer. There is no initial waiting period for accidental claims. 

Expectation: Add or remove the members from the Group Health Insurance plan automatically

Reality: Unlike personal health insurance plans, where you can directly contact your insurance company to add or remove members from your policy, group health insurance policies include your company. This means that to make any add-ons or deletions under your group health plan, you will need to get in touch with the human resources department of the company. 

Expectation: There is no pre-existing waiting period in Group Health Insurance

Reality: Pre-existing conditions require the policyholders to wait a certain amount of time before filing a claim under the group health insurance policy. A pre-existing condition is any illness, disease, or condition that existed at the time the health insurance coverage was first issued. Therefore, in order to claim your health plan for any pre-existing disease, you’ll need to wait for a certain period of time. 

Expectation: Group Health Insurance provides wide coverage 

Reality: Another myth regarding group health insurance is that it provides wide coverage to employees. However, there is a limited amount of coverage that is guaranteed and chosen by the employer. For instance, if your group health plan has a sum assured of Rs. 2 lakhs, and during any medical emergency, your medical bills and expenses cost Rs. 3 lakhs. Therefore, in this case, you will need to pay Rs 1 lakh from your own pocket. 

However, if you’re covered under a personal health insurance policy, you can choose the sum assured amount of your choice and don’t have to worry about expenses during any medical emergency. 


A group health insurance plan is an insurance policy given by an employer to its employees. Though it is one of the great perks offered by the companies, it is not sufficient and does not provide long-term benefits. Therefore, always ensure that you purchase an individual health insurance policy along with a group health plan to get wide coverage during medical emergencies.

Also Read: 

What Is Health Claim Settlement Ratio?


This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.

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