What is group insurance?
Group insurance is a type of coverage provided by an employer or organisation to a group of people. Instead of each individual purchasing their own policy, the entire group is covered under one plan, which is usually more affordable. This option also makes insurance accessible to everyone in the group, as the employer or organisation typically covers all or most of the policy premiums.
What are the types of group insurance plans?
The following are some common types of group insurance plans available in India:
- Group health insurance: A group health insurance policy provides medical coverage for a group of people, typically the employees of a company. The employer buys this plan, and it covers the employees’ medical expenses up to a specific amount. Some types of group health insurance plans also allow employees to add their family members, like spouses and children.
- Group employee deposit-linked insurance: This insurance is linked to the Employee Provident Fund (EPF) and provides benefits based on the employee's contributions. In the event of death or permanent disability, the EPF organisation pays up to INR 7 lakh to the covered employee or their dependents. Employees can also carry this benefit with them when they switch jobs.
- Public liability insurance: This insurance covers third-party liabilities, like injury or property damage caused by the insured’s property or actions. For example, if a client gets injured at your workplace, this insurance covers hospital expenses and legal liabilities.
- Employee compensation insurance: This is a mandatory insurance plan under the Employee Compensation Act. It ensures that the employer covers the related expenses if an employee is injured or has an accident while working. The main goal is to offer financial support to the employee and their family in case of accidental death or disability due to work-related accidents.
- Group pension insurance: An alternative to the Employee Provident Fund (EPF), this group insurance is designed to help employees with their retirement planning. It provides pension benefits after retirement and ensures financial security. Employees can also transfer their pension benefits if they leave the organisation.
- Group term life insurance: This is a life insurance policy that employers often provide to employees as part of their benefits package. It ensures that if an employee passes away, their beneficiaries will receive a lump sum payment. The coverage amount of this insurance typically depends on the employee's salary.
- Group travel insurance: This plan provides coverage for a group of travellers against medical emergencies, lost luggage, third-party liabilities, accidents and other issues that may arise during a trip. It is especially beneficial for employees who travel frequently for work as it gives them peace of mind while they are on the go.
- Group personal accident insurance: This insurance offers protection against accidental injuries, disabilities or death. It covers medical costs, hospitalisation, and in some cases, rehabilitation expenses. It also provides financial support if an employee is permanently or temporarily disabled due to an accident. Also, if an employee passes away due to an accident, the insurance provides death benefits, which are typically paid as a lump sum to the employee's beneficiaries.
Difference between individual insurance vs group insurance
The following are the key differences between individual and group insurance policies:
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Parameters
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Individual Insurance
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Group Insurance
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Eligibility
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Individual insurance is available to anyone who can qualify based on their health and financial situation.
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Group insurance is available to members of an organisation, such as employees or association members.
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Policyholder
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The person who buys the insurance is the policyholder.
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The employer or organisation holds the policy.
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Flexibility
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You can customise the coverage of an individual health insurance policy to suit your specific needs and preferences.
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Group insurance plans tend to have less flexibility as they are designed for a large group with standard coverage options.
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Premiums
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Individual insurance tends to have higher premiums because it is customised for one person.
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Group insurance usually has lower premiums because the risk is spread across many people.
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Coverage for family
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Individual insurance policies can cover the individual only.
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Group insurance lets you add your dependents, extending the policy benefits to your loved ones.
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Claim process
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The individual policyholder handles claims directly with the insurance provider.
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The claims process is typically handled by the employer or organisation, making it simpler for the employee/member.
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Points to consider while choosing a group health insurance policy
When selecting a group health insurance policy, employers or organisations should consider a few key factors to pick the right plan:
- Business needs: Consider your business needs, industry risks and employee profile, such as their age, health and job roles. This will help you choose the coverage that fits your organisation’s goals.
- Compare plans: Compare plans from different providers to understand their coverage options, premiums and the types of group health insurance available. This will help you find one that best fits your organisation’s needs.
- Policy coverage: When you are comparing policies, review the inclusions and exclusions to avoid surprises later. It is wise to choose a plan that covers hospital bills, pre-and-post-hospitalisation expenses, daycare procedures, pre-existing diseases, outpatient care, and more.
- Sum insured: Evaluate the sum insured to make sure it is enough to cover your employees' medical needs. If you are covering a larger group, it is important to choose a higher sum insured, so everyone is well-covered for any medical expenses.
Conclusion
Since businesses and organisations face various risks and challenges, investing in group insurance plans ensures financial security and peace of mind during unforeseen events. Insurance companies offer different types of policies to cover groups of people, so you can explore the available options and select the right coverage. Choosing the right group insurance types will help protect both your employees and your business.
Disclaimer: The information provided in this blog is for educational and informational purposes only. It is advised to verify the currency and relevance of the data and information before taking any major steps. Please read the sales brochure / policy wordings carefully for detailed information about on risk factors, terms, conditions and exclusions. ICICI Lombard is not liable for any inaccuracies or consequences resulting from the use of this outdated information.