For most families, company health insurance is not enough on its own: it is a useful first layer, but your employer sets its terms, a family floater is one sum insured shared by everyone on it, and it ends with the job. Whether it pays a given bill depends less on the sum insured than on four limits in the policy: the room-rent cap, disease sub-limits, who shares the floater, and what happens when you leave. Tanvi's year below puts a rupee figure on the first three.
Where are a group policy's limits written down?
A group health policy is a contract between your employer and the insurer. HR can share its policy schedule or benefit summary, which is where its group health insurance limitations sit: the room-rent limit (1% of the sum insured a day, a fixed rupee amount, or none), the list of sub-limits, the people covered and whether parents share the main floater or sit on a separate parental sum insured, and the date cover ends.
The same schedule lists what group cover does well: many group policies cover pre-existing conditions and maternity from the first day. In it, look for the words "room rent", "sub-limit" and "parental".
What do the four limits do to Tanvi's ₹5 lakh?
Tanvi earns ₹22 lakh CTC. Her employer gives a ₹5,00,000 group floater covering four people: Tanvi, her husband and her parents, aged 62 and 66. The policy has no co-pay and no restoration benefit. Here is one year of claims.
1. The room-rent cap. The policy pays room rent up to 1% of the sum insured a day, which is ₹5,000. Her mother has gallbladder surgery and spends four days in a ₹7,500 single room. The bill is ₹2,50,000: ₹30,000 for the room, ₹1,50,000 for surgeon, doctor and nursing fees, and ₹70,000 for medicines, consumables and tests.
Because the room costs 1.5 times the cap, the policy pays only two-thirds of the room-linked fees: ₹20,000 for the room and ₹1,00,000 of the ₹1,50,000 in fees. Most policy wordings, following IRDAI's 2020 rules on proportionate deduction, do not cut medicines, consumables, implants, diagnostic tests or ICU charges in proportion. IRDAI's 2024 master circular no longer spells this out, so check the room-rent clause in your own policy. Assuming none of the ₹70,000 for medicines, consumables and tests is a non-payable item, the policy pays ₹1,90,000 and the family pays ₹60,000.
2. Disease sub-limits. Her father needs cataract surgery. The policy caps cataract at ₹40,000 an eye, and the bill with the lens his doctor advises is ₹80,000 (an assumed figure; costs vary widely by hospital and lens). The family pays ₹40,000. Group policies often cap cataract, maternity and some modern treatments; the amounts are in the schedule.
3. One floater for four. Two claims have used ₹2,30,000, leaving ₹2,70,000. In the same policy year her father needs a heart procedure costing ₹3,50,000. The policy pays the ₹2,70,000 left and the family pays ₹80,000. For the rest of that year, nothing is left for Tanvi or her husband.
4. Cover ends with the job. If Tanvi changes jobs, this cover usually stops on her last working day. Her new employer may not cover parents at all, and a fresh policy for her parents would start new waiting periods. What happens to company health insurance after resigning covers that gap and how migration keeps the waiting-period credit.
Across the year, the bills come to ₹6,80,000. The policy pays ₹5,00,000 and the family pays ₹1,80,000.
How does the room-rent limit change with the sum insured?
The 1% cap scales with the sum insured, so the same surgery in the same ₹7,500 room pays out very differently.
| Sum insured | Room cap at 1% a day | Share of room-linked fees paid | Paid on the ₹2,50,000 bill |
|---|---|---|---|
| ₹3,00,000 | ₹3,000 | 40% | ₹1,42,000 |
| ₹5,00,000 | ₹5,000 | two-thirds | ₹1,90,000 |
| ₹10,00,000 | ₹10,000 | all | ₹2,50,000 |
| No room cap | none | all | ₹2,50,000 |
A bigger sum insured removes the room-rent cut but not the sharing. For comparison, the insurance planning guide sizes a metro family of four (a couple and two children, with parents on their own policy) at ₹35 lakh or more of total health cover, built as a ₹10 lakh to ₹15 lakh floater plus a super top-up.
What can you add on top of company health insurance?
The largest risk in Tanvi's floater is her parents' claims. A separate policy for them would keep those claims from using up the cover meant for her and her husband. The guide's indicative 2026 premium is ₹30,000 to ₹60,000 a year for a 65-year-old on ₹5 lakh to ₹15 lakh of cover, varying by insurer and health; health insurance for parents over 60 covers the waits and co-pay to expect.
The other layer is personal health insurance for Tanvi and her husband that stays with them whatever happens to the job: a family floater of their own with a super top-up above it, priced by the insurer at their ages. A super top-up on ₹5 lakh office cover works through how the deductible counts the year's claims. Buying while employed has one more advantage: the personal policy's waiting periods run while the group cover still pays.
Dhi looks at protection alongside cash flow, net worth and goals, and nudges when something needs attention. It answers questions like this one from your own numbers and earns no commissions on any policy.
Frequently asked questions
This is general information for salaried individuals in India, not personalised financial advice.
