What is Group Insurance? All You Need to know Definition, Types and Benefits

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Under group insurance, 25 people or more can form a group to issue a master policy. Groups like business firms, banks, hospitals, schools, religious organizations, etc can invest in group insurance for various perils.

For a group to be recognizable for the insurance company, it should be dynamic where there is no restriction on entry and exit.

How is group life insurance premium calculated?

The premium will be based on the number of members and the amount of coverage required. If there is an increase in the number of members, the premium will increase proportionately. Although these rates are negotiable, however, that would depend on the age, profile, and level of precaution taken by group members.

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What kind of Insurance could be bought as a Group Insurance Policy?

  1. Term Insurance
  2. Accidental and disability insurance
  3. Building Pension – Employee Deposit Link Insurance
  4. Health Insurance
  5. Home Insurance
  6. Fire Insurance
  7. If you have taken a Housing loan you are also entitled to a mortgage redemption insurance, as your loan provider must have issued a credit shield policy. And through a single premium, you get the policy too while the sum assured decreases with the reduction of the liability.

Advantages of Group Insurance Policy

As soon as the number of members in your group is more than 25, you can even get a discount of up to 70%, the rates are negotiable. It all depends on the age group, profile, and what level of precaution your group is maintaining.

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For instance, you live in a Housing society that has issued fire and earthquake insurance. Only if fire safety measures are in place and the building is earthquake-proof, the rates of the Group insurance would be negotiable.

  1. GI also has benefits with regards to pre-existing diseases. Once the insurance provider underwrites the group, there are no further individual underwritings, so if you have a disease, you will still be entitled to the claim.

Whose responsibility is it to ensure regular premium payment?

The president is the authorized signatory who will sign all documents.

Group insurance policy document

The group gets a master policy, and not an individual policy, Policy members only get policy numbers.

On whose name the policy issued on?

The master policy is issued on the name of the group, which needs to be registered.

What is insurance group name?

The group that the members are part of has to be given a name. The name has to be registered to issue insurance on behalf of its group members.

Documents Needed for a Group Insurance

  1. Group Registration
  2. Memorandum of association
  3. A document to authorize the president
  4. Purpose of the group

What do we recommend for Group Insurance?

Group insurance is a wise decision as it’s economical however, you should have individual policies too. The problem arises when individuals think that they are secure with group insurance but that is unfortunately not true. When you are not part of a group, you are not entitled to that policy, and those situations may occur.

When are you not part of a group?

  1. For  instance, you are part of an organization and you fall sick, the doctor has recommended bed rest for 6 months, usually, employers are not okay with a 6-month leave, and once you aren’t part of the company for that period, your claim will also go away. Since you are not entitled to it anymore.
  2. The intermediate period when you are switching jobs you are not part of any group.
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Pro Tip- It’s easier if you look at group insurance as a rented property, the moment you move out, you are not entitled.

And if you want a permanent property it’s always wise to invest in individual term/health insurance along with your group insurance

FAQs Related to Group Insurance

Can temples, religious organizations, schools take GI?

Yes, as they are a dynamic group

Can we plan Group Insurance for Life cover by forming an internal group?

Yes, however, the group has to be dynamic where people and enter and exit.

Get Resolutions for Insurance Complaints

We at Insurance Samadhan, provide claim management services for all kinds of insurance, may it be group or individual. Leave all your insurance-related problems to us.

Click here to register your complaint with Insurance Samadhan

You can also

Visit our website: insurancesamadhan.com

Call us on +91 9513631312

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Mail us at corporate@insurancesamadhan.com

Raina Rajpal

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