group insurance is an arrangement in which a large number of people are covered under a single master insurance policy. So what are the important terms used in Group Insurance contracts and their Meanings?
Here are some of the Important terms used in Group Insurance contracts, along with their meanings, associated with group insurance –
Groups:
Outlined in the IRDAI group insurance guidelines, groups can be either employer-employee or non-employer-non-employee. Cultural associations, councils, and different organizations qualify for this.
Cover Amount:
This defines the amount receivable by the policyholder or his/his family in case of disability or death. It depends on the premium and other factors. Note, the death and disability coverages differ from each other.
Read More: How does Group Insurance Cover work?
Master policyholder:
The leader/manager/representative of the group who would receive the master policy certificate. Would issue the policy in the name of the group, e.g. an association, a council, and so on.
- Eligibility Date- It is the date from which the member of a group starts getting coverage.
- Deductible- An amount that should be paid by the policyholder before any benefit is paid by the insurance company.
- Effective Date- The date from which the insurance coverage comes into effect.
- Employee= Mainly a full-time employee who is principal employment is with the employer at the usual place of business or at such places where the employers’ normal course of business may need. Further, he/she is the one who is actively working for the minimum hours per week as stated in the policy application.
The above list is not exhaustive and there can be other terms as well. So, carefully read the group insurance policy document to know more about these policies.
Case
T.L Engineering Co. is a reputed engineering company in Pune. Having its office in all the metropolitan cities, the company employs more than 500 employees. Last year, the company bought a group medical insurance for its employees from Insurer A.
Here, the company covered only those employees in its group health insurance policy who are working full-time. The policy doesn’t cover part-time employees.
Here are some terms that associate with the group health insurance=
1. Master policyholder=
Though the group health insurance policy covers employees, here the master policyholder will be T.L Engineering Co.
Read More: Types of Group Insurance Policies available in India
2. Effective Date=
Last year in November, T.L Engineering Co. approached Insurer A for buying the group health insurance policy. The insurer asked for some documents and details and the entire process, including premium payment, was completed in ten days.
Insurer A issued the group health insurance policy on 25th November and the insurance policy became effective from 25th November.
3. Coverage=
T.L Engineering Co. has a group health insurance policy coverage of Rs 5 lakh. It means, the insurer will compensate for medical expenses up to Rs 5 lakh only even if the expenses are more than this limit.
4. Deductible=
In order to trim group medical insurance premium rates, T.L Engineering Co. also introduced a deductible clause in the policy document. There is a deductible of Rs 10,000.
It means, at the time of claim, the employee has to pay Rs 10,000 on their own and the insurer would cover the remaining as per the situation.
5. Eligibility Date=
T.L Engineering Co. offers a group health insurance policy to all its current employees. Even covered new employees from the date they joined the company. However, the insurance policy doesn’t cover any of the previous claims which were there before they joined T.L Engineering.
For instance, dengue recuperated Rahul Saxena from when he left his present company to join T.L Engineering. It means any of the medical expenses incurred by Rahul on his treatment of dengue will not cover, by T.L Engineering Co. as these he incurred before he joined the company.
Now when he joined the company, a group health insurance policy provided him cover automatically.
