Group Personal Accident

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A group insurance policy is offered to a group of people, which can be both employer-employee and non-employer-employee.

In a group insurance policy, there are two important terms that you should understand –

  1. Free Look Period – If a policyholder has bought a group insurance but is not satisfied with its term and conditions, there is a tenure which is available with the insured during which they can return their policy. In this situation, the premium would be refunded after deducting expenses like a medical test if conducted, etc.

Usually, those group insurance policies which are bought online have the waiting period of 30 days, and the policies bought offline, there is a free look period of 15 days. Within a defined tenure, the policyholder needs to review and scrutinize all the policy document, and in the case of any mismatch between what was offered and what was given, the latter has all rights to returns the policy.

  1. Grace Period – It is the time provided to the policyholder over and above the exact due date to pay the renewal premium without losing any of the insurance benefits. In the case of hospitalization during the grace period, the insurer will cover those medical expenses. So, it is like an extra window which is given to a policyholder for making the premium payment just in case he/she forgets to make the premium payment. Though the premium is due on a specified date, it is possible to pay the premium within grace period as well.

Usually, in most of the cases, the grace period is for 15 days in case of monthly payment mode, and 30 or 31 days in case of quarterly, half-yearly or annual premium policies. Note, the grace period can vary from one insurer to the another.

Read More: Types of Group Insurance Policies available in India

Case: 1

With a workforce of 400 employees, M.S Clothing had carved a niche for itself in the clothing sector. Recently, the company decided to buy a group health insurance for its employees. The company approached the Insurer X who after analyzing all the requirements, suggested a group health insurance plan. M.S Clothing had a good number of women employees, and therefore, the company wanted to cover maternity expenses as well under the policy. The Insurer X agreed to cover the maternity expenses and issued the policy document.

However, when M.S Clothing reviewed the policy document, it found that the insurance company had not covered maternity expenses under the policy. When they approached the group health insurance company, the insurer asked for an additional premium to cover the maternity expenses. As M.S Clothing found that the insurer did not fulfill its promise and in fact asked for an additional premium, then the company decided to cancel its group health insurance policy.

It’s been only five days that M.S Clothing had purchased a group health insurance policy. The insurance policy was still in free look period. The insurer agreed to cancel the policy and refund the premium amount.

Read More: How can I structure a Group Insurance Policy for employees?

If M.S Clothing had approached the insurer after free look period, the insurer would have refunded the premium amount on the proportionate basis. However, here the situation was different. As the company had approached the insurer within free look period, no extra charges were deducted.

Case: 2

L.S Electronics had purchased a group term insurance for its 500 employees. From last five years, the company was regularly paying insurance premiums. The policy played an imperative role in giving financial security to the family of one of the employees who died in a road accident.

Last year, the HR department of the company failed to renew its group term insurance premium on time due to some unknown reasons. Though the premium due date was over, the policy was still under grace period. During this period, one of its employees, Ram Saran was hospitalized due to dengue. The group health insurance company covered medical expenses even when the policy was in the grace period.

As L.S Electronics paid renewal premium when the policy was in the grace period, the insurer did not levy any charges for the delay.

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