More Indians Are Buying Their Own Health Cover Even When The Office Provides It
Retail health insurance is now growing faster than employer group cover in India, and most of the people buying it already hold a policy at work with its own sum insured (the maximum the insurer will pay in a year). They are not replacing the office plan, they are buying the things it cannot give them.
What the Premium Data Shows
The premium data shows retail growing faster than group. General Insurance Council figures reported by Financial Express put retail health premium up 19 percent in the first eleven months of FY26, reaching 48,952.01 crore rupees.
Group health grew 13 percent over the same period, to 63,794.06 crore rupees. Group is still the larger pool and retail is closing on it.
Health insurance as a whole reached 1.24 lakh crore rupees, up 15.32 percent, and now accounts for 41 percent of the non-life industry against 38.40 percent a year earlier.
Why Employer Cover Ends with the Job
Employer cover ends the day the job does, and that is the single biggest reason people buy their own. A resignation, a redundancy or a retirement takes the policy with it.
The timing is what makes it expensive. People most often leave a job in their fifties or at retirement, which is precisely when buying fresh cover costs the most and an insurer looks hardest at your health.
Your medical history does not leave with the policy. An abha card keeps a person’s records with them across employers, hospitals and insurers, even though the cover from work does not follow.
What the Waiting Period Rule Costs You
The waiting period rule only counts time on a policy you own, and that is the cost nobody puts a number on. Pre-existing disease waiting periods run up to 36 months under current rules.
Continuous cover also builds towards the moratorium (the time after which the insurer cannot dispute a claim). After 60 months of unbroken cover, the IRDAI Master Circular on Health Insurance of 29 May 2024 says a claim cannot be contested for non-disclosure unless fraud is established.
Someone who relies only on office cover for a decade has built none of that. Buying at 45 means starting both counts from zero at exactly the wrong age.
Why the Sum Insured Runs Out
The sum insured runs out because the group figure is sized for the average employee, not for the worst year. It is a shared corporate decision about cost, taken without reference to any individual family.
One serious admission in a metro can exhaust it. Anything beyond the limit is paid by the employee, which is the moment people discover what the policy actually covers.
For example, a family with 5 lakh rupees of office cover and a 9 lakh rupee hospital bill pays 4 lakh rupees themselves. A personal policy sitting on top of the group plan is what closes that gap.
Why the Tax Break Only Works One Way
The tax break works only on a policy you pay for yourself. Section 80D of the Income Tax Act allows a deduction on premium you pay, including for parents.
Cover your employer pays for gives you nothing under that section. You are not paying the premium, so there is nothing to deduct.
For anyone paying income tax, that turns part of the cost of a personal policy into tax saved. It is a real part of the arithmetic, and it points in only one direction.
How the GST Cut Changed the Cost
The GST cut changed the relative cost of the two in the same year. The Department of Financial Services confirmed that tax on all individual life and individual health policies went from 18 percent to zero on 22 September 2025.
Employer-sponsored group health and group life policies were left out. They still carry 18 percent.
So an individual policy became about 15 percent cheaper to hold, while the group policy at work did not move at all. That is the sort of change that shows up in a growth rate a year later.
What to Do If You Have Office Cover
Office cover is worth having and not worth relying on. Four steps put a floor under it.
- Buy a personal policy while you are young and healthy, even a small one, so the waiting-period and moratorium counts begin.
- Size it against your city’s hospital prices, not against the number your employer picked.
- Cover your parents separately. Most group plans either exclude them or charge heavily for them.
- Keep the personal policy running when you are between jobs. That is the gap it exists for.
Converting a corporate plan into an individual one at the end is possible with some insurers, but it is a negotiation at the worst moment rather than a right.
Frequently Asked Questions
What is a retail health insurance policy?
It is a policy you buy and own yourself, rather than one your employer provides. It continues regardless of where you work.
Can I convert corporate health insurance to an individual policy?
Some insurers allow it when you leave, usually on their terms and subject to underwriting. It is not a guaranteed right, so it is a weak substitute for owning a policy already.
What are the disadvantages of group health insurance?
It ends with the job, the sum insured is set by the employer, it often carries room rent caps and sub-limits (caps on specific kinds of claims), and it builds no waiting-period credit that you keep.
Does the GST exemption apply to my office policy?
No. The exemption from 22 September 2025 covers individual life and health policies. Employer-sponsored group cover still carries 18 percent.
Can I claim tax on health insurance my employer pays for?
No. Section 80D applies to premium you pay yourself, including for parents. Employer-paid cover gives no deduction.
Key Takeaways
- Retail is growing faster than group. Retail health premium rose 19 percent against 13 percent for group cover in the first eleven months of FY26.
- Office cover ends when the job does. It disappears at the age when replacing it costs the most and an insurer asks the most questions.
- The counts only run on a policy you own. Waiting periods of up to 36 months and a 60-month moratorium build on your own policy, not on the one at work.
- The tax change moved the maths. Individual policies went GST-free in September 2025 while group cover stayed at 18 percent, and Section 80D applies only to premium you pay.
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