Health insurance protection gap: 84% want extra cover, but 45% still don’t have it

Employer-provided health insurance may give corporate employees a basic layer of protection, but a new study highlights a significant gap between awareness and actual coverage. While 84% of respondents said additional health insurance beyond their employer-provided Group Medical Cover (GMC) is important, 45% said they do not have any additional health insurance.

The findings come from Tata AIG General Insurance Company’s The Corporate Health Protection Pulse 2026, which surveyed more than 748 corporate employees aged 28–55 across Mumbai, Delhi, Bengaluru, Hyderabad, Chennai, Ahmedabad, Pune and Kolkata. All respondents were covered under an employer-provided GMC policy.

Awareness is not translating into ownership

The study points to a clear protection gap. Although a large majority recognise the importance of having additional health coverage, nearly half have not purchased a personal policy beyond their employer's GMC.

Lack of awareness and a ‘will buy later’ attitude emerged as key barriers to purchasing additional health insurance, particularly among employees aged 28–34. This suggests that many employees may recognise the potential limitations of employer-sponsored coverage but continue to postpone taking additional protection.

The gap becomes more significant when employees assess whether their existing GMC would actually be sufficient during a medical emergency. Nearly 75% of respondents agreed that employer-provided GMC alone would not be sufficient in the event of emergency hospitalisation.

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No clarity

The issue is not limited to ownership of additional policies. There is also a significant understanding gap around employer-provided insurance.

Only 41% of corporate employees said they were fully aware of all the features and benefits of their employer-provided GMC. This indicates that employees may not have complete clarity about the scope and limitations of the cover they already have.

This becomes particularly important when healthcare expenses are already emerging as a major financial concern. The study found that 94% of respondents said unexpected medical expenses cause them financial stress. Healthcare expenses were also identified as the biggest financial concern during a job transition, ahead of loss of income and EMI obligations.

Health Insurance Protection Gap: Key Data

Source: TATA AIG’s The Corporate Health Protection Pulse 2026.

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Job changes add another layer of risk

Continuity of health insurance is another area where awareness falls short. While 88% consider uninterrupted health insurance coverage during a job change important, only 40% are aware of solutions that ensure continuity of medical cover.

For employees evaluating additional coverage, family protection is the strongest driver. Higher sum insured, coverage for family members and continuity during job transitions were among the most important features respondents would consider when evaluating a top-up plan.

The findings underline that having a Group Medical Cover policy does not necessarily mean employees feel adequately protected. The bigger challenge for corporate India is closing the gap between knowing that additional protection is important and actually securing it.

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