Group Insurance is a type of insurance for a defined group of people, for example, members of a professional organisation, or society or employees of an organization, as per the guidelines that are given by the Insurance Regulatory & Development Authority of India (IRDA). Group Insurance may offer life cover, health cover, and/or other types of personal insurance. Generally, it is taken by an employer on behalf of the employees in order to protect them from various contingencies like accident, hospitalization, death, etc. This not only is beneficial to keep the morale of the employees but it also highly benefits the employer since he can provide insurance to multiple employees, all at once.
Here are 5 things you need to know about Group Insurance plans:
1. What is a Group Insurance Plan?
Group Insurance Plan refers to the type of insurance which covers a group of people instead of one single individual. It can be an insurance policy covering employer-employee groups or non-employer-employee groups that offer standardised coverage.
2. Categories of Group Insurance Plans
There are two types of group plans:
Formal Groups (Employer-Employee): The formal groups include organizations or companies wherein the employer buys the insurance plan to secure the members of his organization.
Informal Groups (Non-Employer-Employee): Such groups include members of similar cultural or social organization. Here the administrator of the group usually buys the insurance to provide coverage for the members of the group.
3. Types of Group Insurance Plans
a. Group Medical/ Health Insurance Plans
b. Group Personal Accident Insurance Plans
c. Group Terms Life Insurance Plans
d. Workmen compensation
e. Group Travel Insurance Plans
4. Benefits of Group Insurance Plans
With Group Plans, you can get a variety of benefits across plans:
Comprehensive Cover: It proves to be very useful in the cases when one cannot afford individual plans.
Low Premium: Compared to other insurance plans available in the market, a group insurance cover provides relatively lower premium.
Ease of Payment: Paying the premium for group insurance is a hassle-free process because there is no delay in the premium payment as it is automatically deducted from the salary of the employee.
Employee Welfare: A group insurance plan is not just a protection for the insured; it also works as an employee retention plan for the company.
Tax Benefits: An employer can claim a tax deduction on premium paid for the group health insurance policy for employees in India.
5. How does it help an organisation?
The employer-employee group insurance is a type of insurance that can be seen as a value add to an employee. It can also be used to attract new talent and to retain your existing employees. Group plans can act as an additional benefit for employees. It can be perceived as an appreciation for their loyalty and commitment.
Are you covered by a Group Insurance Plan at your workplace? Comment and let us know!
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