The group insurance cover is the single contract taken by a group administrator (i.e. a company, a society, etc.). The contract provides coverage to multiple beneficiaries (group members), i.e. the employees of the company. The administrator is responsible for the payment of premium in respect of a group policy.
In case of any incident (which is covered under the contract) with a member of the group, the member is free to file the claim with the insurer directly or can request for a reimbursement/compensation through the employer.
The members are covered under the insurance contract as long as they are a part of the group. If at any member leaves the group, the insurance contract stops covering that person.
Case on Group Insurance Cover
TYT Pvt. Ltd. is a steel manufacturing industry. The management of TYT Pvt. Ltd. decided to take a group life insurance cover for the employees owing to the risks of accidents in the factory while working on machineries and boilers.
They approached a Life Insurance Company to get a suitable cover. The insurance company asked the management to explain what extent of coverage do they want to go for. They asked the management to decide the each of the employee’s coverage depending upon the salary of the employee. Usually, life cover is two times the annual salary of the employee. Based on the total coverage that is required for all the employees of TYT Pvt. Ltd., the insurance company provided a suitable quote and various other teams and conditions attached to the cover, for e.g.: claim settlement procedure, additional rider information, etc.
The company took the responsibility of the premium that is needed to be paid in respect of group life insurance and the insurer issued a master contract of insurance for the records of the company. All the employees were also provided with the individual insurance cards to keep as a proof of insurance for themselves and were also required to upload the beneficiary information on the required portal.
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