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. Benefits of coverage are in accordance with the policy statement provided to the employer or the association that bought the plan. A group insurance plan can be comprised of a life insurance plan, a health insurance plan, or any other kind of personal insurance plan. In this article, let’s look at the different types of group insurance plans offered in India.
What is Group Insurance?
As the name implies, group insurance policies offer insurance coverage to a group of people, who may be workers of an organization, society members, or a group of borrowers. Members of the group may get benefits under a group insurance policy, including loan coverage, life insurance, annuities, superannuation, gratuities, and leave encashment.
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 kinds of group insurance plans offered in India. In India, formal and informal are the two primary groups classifications.
- Formal Groups (Employer-Employee): These groups are typically businesses or organizations where the employer buys an insurance policy to cover the organization’s employees.
- Informal Groups (Non-Employees): These groups include participants from social, cultural, and welfare organizations. Typically, the association’s president or group administrator purchases the group insurance plan to protect the members.
What are the Types of Group Insurance Plans Available in India?
Although there are multiple kinds of group insurance plans on offer, all of them can be clubbed under two main 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 policy’s benefits. For instance, a non-contributory group insurance plan is one in which the employer covers the cost of the employee’s insurance coverage.
- Contributory: As the name implies, this group insurance plan entails the payment of the premium (either entirely or partly) by the group members to receive the insurance coverage benefits. For instance, some businesses may deduct a specified proportion of the insurance premium from an employee’s pay.
Now that we understand how different group insurance plans are categorized, we can have a basic overview of the main sub-types of group insurance available in India.
Further Classification of Group Insurance
The various kinds of group insurance policies offered in India include the following:
- Group Term Life Insurance: This policy provides life insurance to each employee (insured) in the company (organization). The group owner is charged the premium monthly, which is deducted from the employee salaries.
- Group Health Insurance: The group health insurance covers each member’s emergency medical requirements. The costs of diagnosis may also be covered by this plan, along with pre-existing conditions. It may include coverage for dental exams, vision care, and maternity costs in some situations. As a result, it could be used as a cashless card to reimburse medical expenses up to the set maximum.
- Group Personal Accident Insurance Cover: This coverage benefits members of the insured group in the unfortunate event that they meet an accident while at work.
- Group Pension/Superannuation Plans: Because they guarantee a sense of safety and security, pension plans are regarded as one essential insurance coverage. Employers often provide Group Pension or Superannuation Plans to meet an employee’s retirement needs. It is also an adequate substitute for well-known retirement programs like EPF (Employee Provident Fund) and NPS (National Pension Scheme).
- Workers/Employee Compensation Insurance: Under the Employee Compensation Act (which the Ministry of Labour governs), employers must provide workers with worker compensation insurance. The insurance program covers an employer’s legal obligations in the event that a worker is hurt or killed due to an accident that occurs while they are on the job.
- Public Liability Insurance: This is appropriate for organizations that engage in direct public interaction or offer expert services to individuals. Such people might be subject to legal scrutiny and punishment for the outcomes of their choices made while performing the service. Such costs incurred by the insured group or its members are covered by this insurance.
- Group Travel Insurance: A group travel insurance combined liability, accident, and health coverage. This plan protects a group of travelers from the danger of lost luggage, accidents, medical emergencies, and third-party liabilities. Businesses can also get group travel insurance for workers who frequently travel throughout the year. The number of travel days in a year is considered when calculating this plan’s price.
CONCLUSION
In this article, we have only glossed over the various types of Group Insurance. If you happen to be an employer looking for further information, you must research each of these plans and see which would suit your employees.
A Group Insurance Plan can be a great perk to offer your employees, increasing employee satisfaction across the organization.
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