How can an Employee Maintain Insurance Coverage after Being Laid Off?

Losing one's job can be stressful and full of uncertainty. In such a situation marked by financial instability, continued access to essential healthcare benefits becomes even more important. A lapse in coverage can leave one financially vulnerable in the face of unexpected medical bills. This article will guide you on how can an employee maintain insurance coverage after being laid off, helping safeguard their overall well-being during times of unemployment.

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Steps to Maintain Insurance Coverage After Being Laid Off

Unlike some countries where healthcare is predominantly state-funded, in India, employer-provided group health insurance plays a crucial role in the healthcare ecosystem. This coverage typically offers more extensive benefits with lower premiums, owing to the collective bargaining power of a group.

However, when an individual is laid off, they are suddenly exposed to the vulnerability of not having any health insurance. This can lead to delayed treatments due to cost concerns, and a single health emergency can potentially result in crippling medical debts.

Identify Your Insurance Needs

Following a layoff, your specific insurance needs will depend on several factors such as your age, health status, and family situation. Here are some common options to consider:

  • Comprehensive Individual Health Insurance: These plans offer coverage for a wide range of medical services, including doctor visits, hospitalisation, surgery, and prescription drugs. This type of coverage is crucial for anyone who wants to protect themselves from unexpected medical bills.
  • Top-up Plans: If you already have a basic health insurance plan outside your employment, consider a top-up plan. This acts as an additional layer of coverage after you exhaust the sum insured by your primary plan.
  • Critical Illness Cover: This type of cover provides financial support in case of a critical illness like cancer or heart disease.
  • Family Floater Plans: These plans cover the entire family under one policy, including spouse and dependent children. This can be a cost-effective option for families seeking comprehensive coverage.

Regardless of your specific needs, ensuring health insurance coverage should be a top priority following a layoff. Medical emergencies are unpredictable and can occur at any moment.

They not only impose significant financial strain but also lead to considerable mental distress with constant concerns for the well-being of yourself and your family. Securing health insurance enables you to concentrate on your job search with a sense of security and peace of mind.

Check Viable Options to Meet Your Health Needs

  • Reviewing Current Employer-Offered Policy: Employees should first review their current employer-offered policy's terms. Exploring the option to convert the group insurance to a personal insurance plan is beneficial, though it may require medical re-evaluation. If continuing with the existing insurer isn't viable, consider porting to an individual policy from a different provider.
  • Negotiating Extended Health Coverage: Negotiating with the employer for extended health coverage as part of a severance package can also be a valuable step, especially in cases of sudden layoffs. If these options don't work out, purchasing a new individual policy is advisable. Additionally, employees should check their eligibility for government health schemes like Ayushman Bharat and PMJAY, which offer free or subsidised insurance to economically weaker sections.

Strategies for Managing Expenses After Being Laid Off

Navigating through periods of unemployment requires meticulous financial planning, particularly when it comes to managing critical expenses.

  • Evaluate Financial Situation: Start with a thorough assessment of your savings, income sources, and ongoing expenses. Understanding your financial landscape is critical for effective planning.
  • Prioritise Expenses: Allocate funds primarily to crucial expenses such as housing, utilities, health, and groceries, ensuring your fundamental needs are met. Identify and cut back on discretionary expenses like luxury items, entertainment, and dining out to conserve financial resources.
  • Seek Flexible Payment Options: Pay in instalments wherever possible. Even for your health insurance, contact your provider to discuss possible flexible payment plans for your premiums.
  • Leverage Liquid Assets: Consider using liquid assets as a temporary financial cushion, but be mindful of potential penalties or losses involved in liquidation.
  • Consult Financial Experts: If needed, seek advice from financial planners or advisors for personalised strategies to navigate your specific financial situation during unemployment.

Resources and Support Services

Losing your job and navigating insurance options can be overwhelming. Here are some resources that can help:

  • Insurance Providers: Platforms like Policybazaar allow you to compare quotes and plans from various insurance companies. This can help you find the most affordable and suitable coverage for your needs.
  • Government Websites: The official websites of the Insurance Regulatory and Development Authority of India (IRDAI) and Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (AB-PMJAY) provide detailed information on different insurance schemes and eligibility criteria.
  • HR Department: Even after leaving the company, it's worth checking with your former HR department. They might have information on the continuation of coverage options or employee assistance programs that can offer guidance on insurance matters.
  • Emotional Support: Job loss can be stressful. Talking to individuals who have gone through similar situations can provide emotional support and empower you to make informed choices during a challenging time.


Losing your job doesn't have to leave you vulnerable. By managing your finances through budgeting and cost-saving measures, seeking expert assistance, and taking advantage of available resources, you can navigate this transitional period effectively and maintain your well-being. Visit Policybazaar and speak with an expert for personalised advice and explore a range of insurance options that cater to your unique healthcare needs.


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Written By: PolicyBazaar - Updated: 26 March 2024

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