Group Insurance

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Financial prosperity may be difficult to achieve if you are staring at a ladder going up. While planning to climb this ladder, you should also consider accounting for the inherent risks which are unpredictable.
These risks if financially significant and can push you down the ladder if you lack a contingency plan to stay undeterred. This applies to a group of individuals too, where each other depends on everyone else to achieve the common goal.

So, can you cover all kinds of risks as a group?

Types of Risks Possible to Cover as a Group

Following risks are covered under insurance policies for groups:

  • The Threat to Life: As is the human nature, a group of individuals with a common interest is at continuous risk of losing members’ life. Anything can happen, and sudden demise of a person can be the quite devastating.
  • Professional Liability: There are many professions, for example, medical, IT, legal, financial services, etc. where professionals need to make difficult decisions within a tight time-frame. It can lead to errors and lawsuit, this is the professional liability risk these professionals are exposed to.
  • Health & Critical Illness: Another common threat to a group is suffering from a life-threatening disease or hospitalization. It is not just our biological clock ticking, but critical diseases are now Omnipresent as far as age in concerned. We all are at risk due to heredity, or any other grouping factors like workplace health hazards
  • Personal Accident: Accidents can happen anytime, resulting in serious injuries and grounding a person for a long time. Travel risks are not far-fetched at all. Its consequences can be lasting like disability or extended recovery period.
  • Retirement Security: This is one of the major issues in the unorganized sector, and insurance offers the inexpensive solution. A small amount deducted from the salaries of employees and a matching contribution from the employer ensures that your employees can be financially safe even after they retire.

Why Cover Risks as a Group?
Most of the risks faced by people can be covered through individual policies. But, when you have formed a group with common interest, like employees of an organization, medical staff in a hospital, lawyers in a partnership firm, etc. the cost of coverage can be 30 – 40% lower than total individual cost.
Management of policy is easier in a group, as you are assigned an administrator, who will not only assist you in the regular management of the policy but also answer any queries the members have.
The Claim process is smoother in a group insurance policy. Since the group has been formed with an aim to serve a common purpose, individuals in the group are associated with a lot of care. Thus, the insurer can be safe from an adverse selection of risks. Therefore, whenever a claim is sent from the group to the insurer, it is considered a genuine claim unless found otherwise.

Types of Groups Eligible for Group Insurance

To avail group cover benefits, a group has to be legally recognized for insurance purpose. There are various kinds of groups of people, who can avail a group insurance cover for their members:

  1. Workers/Employees: It is easy to comprehend. Workforce in the organised sector is exposed to various risks. Health, life, critical illness, retirement cover, travel hazards, can be identified as group risks affecting a group of employees.
  2. Union Members: It is also traditionally managed under group risk to labourers. Workers compensation is the standard practice, which secures life of a worker against hazardous work conditions they work in.
  3. Club Members: Any social or cultural group recognised under the law, can be eligible for group insurance.
  4. RWA’s: RWA consists of individuals who have bonded with a common interest of residing in a designated area. Since the RWA members are associated with each other for a social/business purpose, they can avail various group insurance policies.
  5. Students: Students travelling to a foreign destination for study can be covered as a group. Such cover is useful as they may face issues in money transfers and health during their extended stay in foreign lands.
  6. Consumer (Credit Card Members): Credit card companies usually offer their customers various types of insurance protection, including on the products bought through the credit card.
  7. Home/Building Insurance: Building is a crucial cover, which can be purchased by the residents collectively. Building insurance members enjoy (individual property risk cover) under the group insurance policy.
  8. Passenger Groups: Group of people travelling together can insure themselves against risks like baggage loss, passport loss, health issues, etc. The group can also be covered for any incidents during transportation.
  9. Social Groups: Any group voluntary formed to serve the society can be covered under a group insurance policy.

Kinds of Risks You Can Cover as a Group
Group insurance cover can be bought for any or all of the following risks:

  • Life risks
  • Personal accident risks
  • Medical coverage
  • Death benefit
  • Leave encashment
  • Gratuity benefits (for an employer)
  • Default payment in case of credit card
  • Damage to property or society we live in
  • Travel hazards
  • Workplace hazards
  • Risk of sudden financial/legal liability

There are multiple insurance covers available today. Take for example a plan by HDFC ERGO, which offers group insurance cover for the students studying abroad. It offers travel insurance plan for a fixed period, to cover student risks like health, maternity, or in-transit loss of baggage. A New India insurance plan for students covers risks like disability as well.
Comparing various products is a major step in buying any product whether financial or otherwise. Similarly, insurance policies can also be compared on various factors including the needs of the target group. Online insurance advisors like SecureNow make this process rather smooth and quicker and offer 24×7 customer support for the management of the policy and claims.
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