₹5 lakh health cover is becoming the new baseline as employers deepen employee benefits
The share of employers offering more than ₹5 lakh in health cover has risen 53% since FY22, while those providing maternity cover above ₹75,000 have jumped 155%. Group term life and personal accident cover have also surged 179% over the same period.
- Oct 7, 2026,
- Updated Oct 7, 2026 2:30 AM IST
Indian employers are moving beyond basic health insurance, with richer medical cover, higher maternity limits and preventive healthcare becoming increasingly common employee benefits, according to Plum’s The Standard of Employee Benefits 2026–27.
Health insurance offered by employers is getting deeper, as companies increasingly look beyond basic hospitalisation cover to build broader healthcare packages for employees and their families.
The report shows that the share of companies offering a sum insured of more than ₹5 lakh has increased 53% since FY22. At the same time, employers offering maternity cover above ₹75,000 have increased 155%, while the addition of group term life and personal accident cover has risen 179%.
₹5 lakh cover moves into the mainstream
The shift is particularly visible in the report’s comparison of benefit packages. What was considered a stronger benefits package a few years ago is increasingly becoming the norm.
The report says the 2023–24 top-quartile organisation is roughly the median organisation today on insurance and healthcare measures. Its benchmark table shows ₹5 lakh sum insured for the median organisation in 2025–26, alongside family coverage, maternity cover of ₹50,000, GPA and GTL, and benefits such as telehealth and mental-health support.
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This suggests that employers are no longer competing only on whether they provide health insurance, but increasingly on how comprehensive that cover is.
Key employee health-benefit trends
| Benefit trend | What the Plum report found |
|---|---|
| Health cover above ₹5 lakh | 53% increase since FY22 |
| Maternity cover above ₹75,000 | 155% increase since FY22 |
| Term life & personal accident cover | 179% increase since FY22 |
| Average benefits beyond insurance | Increased from 1 to 3 |
| Healthcare share of total benefits spend | Rose from 3% to 6.1% since FY23 |
| Healthcare spending per employee | More than doubled since FY23 |
| Median investment in health benefits | 14.7% CAGR over the last three years |
| Median organisation's health cover | ₹5 lakh sum insured |
| Median organisation's maternity cover | ₹50,000 |
| Additional benefits gaining ground | Telehealth, mental health and health check-ups |
Source: Plum
Healthcare spending is rising too
The expansion is not limited to insurance. Plum’s report says median investment in health benefits per employee has grown at a 14.7% compound annual growth rate over the last three years. The report attributes this increase not only to healthcare inflation but also to improvements in the quality and coverage of benefits.
Healthcare is also becoming a larger part of the overall benefits budget. Since FY23, the share of healthcare spending in total benefits expenditure has risen from 3% to 6.1%, while median healthcare spending per employee has more than doubled.
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The average number of healthcare benefits offered in addition to insurance has also increased from one to three, with telehealth, health check-ups and mental-health support increasingly becoming part of the benefits stack.
From insurance to holistic healthcare
The report points to a broader change in employer strategy: companies are moving from an insurance-first model towards holistic healthcare, combining insurance with preventive and primary healthcare.
This trend is visible across employer categories, although the pace differs. Funded startups are adopting comprehensive benefits early to compete for talent, while local Indian businesses are still catching up with funded and international companies.
For employees, the change means the headline number on the insurance card may increasingly be only one part of the benefits package. The bigger shift is towards employers offering higher coverage alongside preventive care, mental-health support, telehealth and broader family protection.
MUST READ: IRDAI’s insurance distribution reforms: What changes for insurers, brokers, customers
Indian employers are moving beyond basic health insurance, with richer medical cover, higher maternity limits and preventive healthcare becoming increasingly common employee benefits, according to Plum’s The Standard of Employee Benefits 2026–27.
Health insurance offered by employers is getting deeper, as companies increasingly look beyond basic hospitalisation cover to build broader healthcare packages for employees and their families.
The report shows that the share of companies offering a sum insured of more than ₹5 lakh has increased 53% since FY22. At the same time, employers offering maternity cover above ₹75,000 have increased 155%, while the addition of group term life and personal accident cover has risen 179%.
₹5 lakh cover moves into the mainstream
The shift is particularly visible in the report’s comparison of benefit packages. What was considered a stronger benefits package a few years ago is increasingly becoming the norm.
The report says the 2023–24 top-quartile organisation is roughly the median organisation today on insurance and healthcare measures. Its benchmark table shows ₹5 lakh sum insured for the median organisation in 2025–26, alongside family coverage, maternity cover of ₹50,000, GPA and GTL, and benefits such as telehealth and mental-health support.
MUST READ: Insurance or investment? IRDAI’s proposed mis-selling rules put bank-sold policies under the scanner
This suggests that employers are no longer competing only on whether they provide health insurance, but increasingly on how comprehensive that cover is.
Key employee health-benefit trends
| Benefit trend | What the Plum report found |
|---|---|
| Health cover above ₹5 lakh | 53% increase since FY22 |
| Maternity cover above ₹75,000 | 155% increase since FY22 |
| Term life & personal accident cover | 179% increase since FY22 |
| Average benefits beyond insurance | Increased from 1 to 3 |
| Healthcare share of total benefits spend | Rose from 3% to 6.1% since FY23 |
| Healthcare spending per employee | More than doubled since FY23 |
| Median investment in health benefits | 14.7% CAGR over the last three years |
| Median organisation's health cover | ₹5 lakh sum insured |
| Median organisation's maternity cover | ₹50,000 |
| Additional benefits gaining ground | Telehealth, mental health and health check-ups |
Source: Plum
Healthcare spending is rising too
The expansion is not limited to insurance. Plum’s report says median investment in health benefits per employee has grown at a 14.7% compound annual growth rate over the last three years. The report attributes this increase not only to healthcare inflation but also to improvements in the quality and coverage of benefits.
Healthcare is also becoming a larger part of the overall benefits budget. Since FY23, the share of healthcare spending in total benefits expenditure has risen from 3% to 6.1%, while median healthcare spending per employee has more than doubled.
MUST READ: Insurance commissions grew up to 6 times faster than premiums: What IRDAI wants to change
The average number of healthcare benefits offered in addition to insurance has also increased from one to three, with telehealth, health check-ups and mental-health support increasingly becoming part of the benefits stack.
From insurance to holistic healthcare
The report points to a broader change in employer strategy: companies are moving from an insurance-first model towards holistic healthcare, combining insurance with preventive and primary healthcare.
This trend is visible across employer categories, although the pace differs. Funded startups are adopting comprehensive benefits early to compete for talent, while local Indian businesses are still catching up with funded and international companies.
For employees, the change means the headline number on the insurance card may increasingly be only one part of the benefits package. The bigger shift is towards employers offering higher coverage alongside preventive care, mental-health support, telehealth and broader family protection.
MUST READ: IRDAI’s insurance distribution reforms: What changes for insurers, brokers, customers