In InsuranceSamadhan.com’s A-Z Blog series on Insurance topics, we try to provide all vital information related to the Insurance sector and demystify certain myths related to the sector. In today’s blog, we are sharing detailed information regarding – Group Insurance policy – and everything that one needs to know.
Group insurance is the method of buying various type of risk covers for the members of a group like Employees, Social Group Members, Society members. This facility is win-win for all partners of the contract as detailed below:
- Risk coverage to all members of the group.
- Lower premium cost in comparison to individual insurance.
- Member satisfaction leads to better retention.
- Insurance Company gets a large number.
- Tax benefits to the group like employer.
What is the Definition of Group Insurance?
Insurance companies accept a group having minimum 25 members. Group should be dynamic which means there should be regular entry and exit of members. Group should have a purpose and cannot be formed only for the purpose of insurance.
Insurance companies issues a Master Policy Contract in favour of the group. Members do not receive any policy contract; they mention only the number of Master Policy contract.
Products which can be sold under group insurance:
- Group term life Insurance: In case of death of member, insurer pay claim amount to the nominee of member. However, group cover has limited sum assured as per norms of group underwriting. Premium rates can be 50% lower than individual policies. This product is mainly bought by companies to provide basic cover to their employees. But can be offered to any group.
- Group Accident and Disability Cover: In case of accidental death or disability, defined benefits are paid. This is a wonderful solution which gives reassurance to group members.
- Group Health Cover: This is the most popular product, where all members are covered for hospital expenses or other risks related to diseases. All major hospitals offer special facilities to group members.
- Workman Compensation scheme: Covers risk of accidental death or disability due to the hazardous activity of work. It offers many other benefits in comparison to only accident and disability.
- Mortgage Redemption Insurance: Each creditor gives loans to many people and they need to cover their credit risk. In case of death of a debtor, balance loan amount is paid to the creditor by insurer.
- Home Insurance: Offer Fire and Peril Insurance to a group of houses.
- Gratuity and Superannuation funds: These are saving schemes.
Benefits of Group Insurance:
- No individual underwriting – can include members with pre existing diseases
- Lower premium. Depending upon size and quality of group, premium can be reduced up to 70%.
- Easy processing of claims.
Problem of Group Insurance:
A member is covered till it is part of group. For example, an employee would lose all benefits the moment they leave the job or terminated. Many people approach Insurance Samadhan with the problem of claim rejection because they are not part of the group. They think, they have coverage. It is advised that each member should have both self as well as group cover.
If as a company or as an individual you are facing any problem with claim rejection, please reach out to us at InsuranceSamadhan.com. At InsuranceSamadhan.com, we have resolved over 12,600 cases related to all types of Insurance products for our clients across India.
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