A group insurance is an arrangement in which a large number of people are covered under a single master insurance policy.

Here are some of the terms, along with their meanings, which are associated with a group insurance contract-

  • Groups: Outlined in the IRDAI group insurance guidelines, groups can be either employer-employee or non-employer-non-employee. Cultural association, councils and different organisations qualify for this.
  • Cover Amount: This defines the amount receivable by the policy holder or 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. The policy would be issued in the name of the group, e.g. an association, a council and so on.
  • Eligibility Date= It is 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 employees more than 500 employees. Last year, the company bought a group medical insurance for its employees from the Insurer A.

Here, the company covered only those employees in its group health insurance policy which are working full-time. The policy doesn’t cover part-time employees.

Here are some terms associated with the group health insurance=

  1. Master policyholder= Though, the group health insurance policy is meant to cover employees, here the master policyholder will be T.L Engineering Co.

Read More: Types of Group Insurance Policies available in India

  1. Effective Date= Last year in November, T.L Engineering Co. approached the 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.

The Insurer A issued the group health insurance policy on 25th November and the insurance policy became effective from 25th November.

  1. 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.
  2. 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 its own and the remaining will be covered by the insurer as per the situation.

  1. Eligibility Date= T.L Engineering Co. offers group health insurance policy to all its current employees. Even new employees are covered 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, Rahul Saxena was recuperated from dengue 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 be covered by T.L Engineering Co. as these he incurred before he joined the company.

Now when he has joined the company, he is automatically covered under a group health insurance policy.

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