Group insurance is a type of insurance plan that covers a group of people, usually the staff of an organization or the members of an association. Coverage benefits are consistent with the policy statement provided to the employer or association that purchased the plan. A group insurance plan can be made up of a life insurance plan, a health insurance plan, or any other type of personal insurance plan. In this article, let us look at the different types of group insurance plans offered in India.
What is group insurance?
As the name suggests, group insurance policies provide insurance coverage to a group of people, which can be workers in an organization, members of a company, or a group of borrowers. Group members may receive benefits under a group insurance policy, including loan coverage, life insuranceannuities, retirement pensions, gratuities and collection of leave.
How are groups defined?
Understanding the different types of organizations that can benefit from a group insurance policy is essential before delving into the many types of group insurance plans offered in India. In India, formal and informal are the two main group classifications.
- Formal groups (employer-employee): These groups are usually companies or organizations where the employer buys an insurance policy to cover the employees of the organization.
- Informal groups (non-employees): These groups include participants from social, cultural and welfare organizations. Typically, the president or group administrator of the association purchases the group insurance plan to protect members.
What types of group insurance plans are available in India?
Although there are several types of group insurance plans, all of them can be grouped into two broad categories of group insurance: non-contributory and contributory.
- Non-contributory: In this group insurance plan, group members or employees are not required to pay a premium to receive the benefits of the policy. For example, a non-contributory group insurance plan is one in which the employer pays for the cost of the employee’s insurance coverage.
- Contributory: As the name suggests, this group insurance plan involves the payment of the premium (in whole or in part) by the members of the group to receive the benefits of the insurance coverage. For example, some companies may deduct a set proportion of the insurance premium from an employee’s salary.
Now that we understand how the different group insurance schemes are categorized, we can have a basic overview of the main sub-types of group insurance available in India.
Additional Group Insurance Classification
The different types of group insurance policies offered in India include the following:
- Group term life insurance: This policy provides life insurance to every employee (insured) of the company (organization). The group owner is billed the premium monthly, which is deducted from employee salaries.
- Group health insurance: Group health insurance covers the emergency medical needs of each member. Diagnostic costs may also be covered by this plan, as well as pre-existing conditions. It may include coverage for dental exams, vision care and maternity expenses in certain situations. As a result, it could be used as a cashless card to reimburse medical expenses up to the fixed maximum.
- Individual Group Accident Insurance Coverage: This coverage benefits members of the insured group in the unfortunate event that they encounter an accident at work.
- Retirement plans/group retirement: Because they provide a sense of security, pension plans are considered essential insurance coverage. Employers often offer group retirement or retirement plans to meet an employee’s retirement needs. It is also a suitable substitute for well-known pension programs such as the EPF (Employee Provident Fund) and the NPS (National Pension Scheme).
- Workers’ Compensation/Employee Insurance: Under the Employees Compensation Act (governed by the Department of Labour), employers must provide workers with workers’ compensation insurance. The insurance program covers an employer’s legal obligations in the event that a worker is injured or killed due to an accident that occurs while at work.
- Liability insurance: This is appropriate for organizations that engage in direct public interaction or offer expert services to individuals. These individuals could be subject to legal review and penalties for the results of their choices made while performing the service. These costs incurred by the insured group or its members are covered by this insurance.
- Group travel insurance: Group travel insurance combining civil liability, accident and health. This plan protects a group of travelers against the danger of lost luggage, accidents, medical emergencies and civil liability. Companies can also obtain group travel insurance for workers who travel frequently throughout the year. The number of travel days in a year is taken into account when calculating the price of this plan.
In this article, we have only glossed over the different types of Collective insurance. If you happen to be an employer looking for additional information, you should research each of these plans and see which one would suit your employees.
A group insurance plan can be a great benefit to offer your employees, increasing employee satisfaction throughout the organization.