You can buy a group insurance policy if there are members who gather together with a common purpose or engage in a common activity. Further, there are some other guidelines that should be considered to buy a group insurance policy, like:
1. Most of the group insurance policies are about the employer-employee. However, other groups can also purchase the group insurance scheme, which has some commonality of interest. It means, you can buy a group insurance policy, even if you are related to non-employer-employee groups like credit cardholders, customers of a specific business, employee welfare associations, borrowers of a bank, etc. Also, professional associations or societies may also become under a group, provided the manager/secretary/president in his capacity as an organizer enjoys authority from a majority of the groups to buy insurance on their behalf or is doing as a necessity for other matters, like bank buying group insurance on the life of its depositors.
In the case of employer-employee groups, the group insurance policy may be either contributory or non-contributory without any limitation on the contribution of an employer.
2. Your group should not form with the sole objective of availing of insurance. As premium rates of group insurance schemes are cheaper, many people form a group to avail of insurance. However, if this is the case, the insurer can refuse to issue a group policy. It is necessary to have a clear relationship between the member and the group manager for services which should not be related to buying insurance only. While a homogenous group of people may think of buying insurance to enjoy lower premium costs, a person negotiating group rates and then searching for members to buy group policy may not be able to buy the policy.
3. The criteria of having the minimum number of employees vary from one insurer to another.
4. The entry into the group for individual members would define evenly, either from a definite date like the next anniversary or the first of the following month or identifiable events like the commencement of employment, date of sanction of loan, date of the travel, etc. Group insurance policy will however cease to exist if a member leaves the group except in those situations where it is explicitly mentioned that the person will get a group cover even after leaving the group, like after retirement.
Read More: What Is Covered Under Group Health Insurance?
Case 1: Group Health Insurance Policy
MKM Engineering Company, a leading engineering company, is an associate company of MKM Group. Employing over 500 employees, the company undertook several challenges and prestigious projects across many firms in India. Today well-acclaimed for its high skills and reliability in various quality services. The company can buy a group health insurance policy for all its employees working in different offices pan India. To buy group health insurance, either contact the group insurance company or take help from corporate insurance advisors like SecureNow.
The company covers all new employees under its policy who may join the organization after buying the group insurance policy. In case any employee leaves the organization, should immediately notify the insurance company to cancel their coverage. MKM Engineering can also extend group cover to its retirees as well. For that, they should notify the insurance company and get it written in the policy document. The insurer may charge a slightly extra premium to cover retirees.
Case 2: Group Personal Accident Insurance Policy
RSM Bank can buy a group of personal accident insurance for all its credit cardholders. The policy will ensure that in the case of accidental death or disability following an accident. Pays a certain amount to the nominee or credit card holder, respectively. To buy the policy, the bank has to ensure that it has the minimum number of members, which is a prerequisite for buying a group cover.
Read More: What benefits are available under Employee Group Health Insurance?
Case 3: Group Travel Insurance
Jeevan Kumar has an interior business in Delhi. As his client base spread across different countries. He frequently travels overseas for meeting clients and exploring business opportunities. Here, he can only buy individual travel insurance to cover his overseas traveling. However, if he first approaches the group insurer to get premium quotes and then finds such people who frequently travel abroad to convince them to form a group and buy a group insurance policy, the insurer can refuse to issue a group policy.
About The Author
Himanshi
MBA Insurance Management
With over 8 years of dedicated experience in the insurance industry, Himanshi has established herself as a leading expert in group insurance. As a prolific writer for SecureNow, she produces informative and engaging blogs and articles that shed light on the intricacies of group insurance, helping businesses and individuals make informed decisions about their coverage options. Throughout their career, Himanshi has developed a deep understanding of various aspects of group insurance, including employee benefits, policy selection, and risk management. Their expertise allows them to translate complex insurance concepts into clear, actionable insights, making their content an essential resource for readers looking to navigate the world.
