What happens to the corporate health insurance top-up premium in the event of a layoff?

What happens to the corporate health insurance top-up premium in the event of a layoff? For instance, in my case, my company had a Rs 5 lakh corporate health insurance policy with the option to pay a top-up to increase coverage for the period of January to December. Over the past two months, I paid approximately 14K for this extra coverage. However, I was laid off two weeks ago, and the final installment of the top-up was deducted from my full and final settlement.

My question is whether I can claim a refund for this amount. I reached out to the insurance representative, Marsh, to inquire about continuing or porting the policy until the end of the year. However, I was informed that an additional amount of over 1 Lakh would be required for a Rs 5 lakh floating coverage.

I am uncertain if the extra top-up will still be valid if I pay this additional amount and accept the new policy.

Advice by Ashish Yadav, Head Products & Operations, ManipalCigna Health Insurance

Employers offer group or corporate insurance to employees and their families, but coverage ends once an employee departs. Transitioning to an individual health insurance policy guarantees ongoing coverage customized to your unique health requirements.

Regarding the refund of the top-up premium, most health insurance policies, including top-up plans, are governed by specific terms and conditions. Typically, if the premium is paid in instalments, as in your case, refunds are generally not provided once the coverage period has commenced. The final instalment deducted from your full and final settlement would likely cover the remaining duration of the policy term (January to December). 

However, if the policy allows for mid-term cancellation, you may be eligible for a pro-rata refund for the unused portion of the coverage. This would depend on your insurer's refund policy and whether you have formally requested cancellation, provided you have not made any claim in this policy.

We recommend reviewing the policy documentation or reaching out to the insurer directly to confirm their stance on refunds for prematurely terminated policies.

Why should one have individual health insurance along with corporate health insurance?

Corporate Health Insurance is a health insurance policy offered by employers to their employees, providing them with comprehensive health coverage. This insurance typically covers employees, their spouses, and children, with some plans extending coverage to parents as well.

The policy usually includes a fixed sum insured amount for hospitalization due to illness or accidents requiring more than 24 hours of hospital stay. If employees wish to increase their sum insured amount, they can do so by paying an additional premium.

Suppose you are serious about planning for your future. In that case, it is wise to view your corporate insurance policy as a secondary option alongside a separate health insurance plan that caters to your specific medical needs.

While having a coverage of Rs 5 lakh may seem adequate now, it may not hold up in the long run, especially after 20 years. Opting for a lower coverage amount is a notable concern that can arise with corporate policies.

The corporate health insurance provided is contingent upon your active employment with the organization. However, the policy will be terminated immediately upon the termination of your employment. Consequently, you may find yourself without insurance coverage until you secure employment elsewhere.