Group Insurance Policy refers to the type of health insurance that covers a ‘group’ of people instead of one individual. So, the only condition is for all members of one group to include in a single policy is that the group’s risk should be homogeneous.
The ‘Groups’ can be of two types:
- Formal Groups (Employer-Employee): The formal groups include organizations or companies. Wherein the employer buys the insurance plan to secure the members of his organization.
- Informal Groups (Non-Employer-Employee): Such groups include members of similar cultural or social organizations. Here the administrator of the group usually buys the insurance to cover the members of the group.
There are different types of group insurance policies available in the market. Some of the traditional group policies include Life term group Insurance cover, Medical Cover, pension schemes, and several other retirement benefits.
Group health insurance policy is a health insurance plan that is offered by an employer or an association to cover their employees/members and their dependents. The premium for the policy is paid by the employer/association and the coverage is extended to the insured individuals. The policy provides coverage for medical expenses that may arise due to illness or accidents.
Types of group health policy:
- Employer-sponsored group health insurance: This type of policy is provided by the employer to their employees as a benefit. The employer bears the premium cost and decides the coverage limit.
- Association group health insurance: This type of policy is provided by associations to their members. The association bears the premium cost and decides the coverage limit.
- Government-sponsored group health insurance: This type of policy is provided by the government to their employees. The government bears the premium cost and decides the coverage limit.
Variants of group health policy:
- Basic group health insurance: This type of policy covers the basic medical expenses incurred by the insured. It includes hospitalization expenses, doctor’s consultation fees, diagnostic tests, and medication costs.
- Comprehensive group health insurance: This type of policy covers both basic and major medical expenses incurred by the insured. It includes pre and post-hospitalization expenses, ambulance charges, and critical illness cover.
Benefits:
- Cost-effective: Group health insurance policies are generally more affordable than individual health insurance policies, as the premium cost is shared between the employer/association and the insured individuals.
- Covers pre-existing diseases: Group health insurance policies cover pre-existing diseases, which are generally excluded in individual health insurance policies.
- No medical check-up required: Group health insurance policies do not require the insured individuals to undergo a medical check-up before the policy is issued.
- Customizable coverage: The employer/association can customize the coverage as per their requirements and the premium cost can be adjusted accordingly.
Coverages provided by group health policy:
- In-patient hospitalization expenses: This includes expenses incurred during hospitalization such as room rent, doctor’s fees, nursing charges, and medical supplies.
- Out-patient expenses: This includes expenses incurred for doctor’s consultation fees, diagnostic tests, and medication costs.
- Pre and post-hospitalization expenses: This includes expenses incurred 30 days before and 60 days after hospitalization.
- Maternity expenses: This includes expenses related to childbirth and related complications.
- Critical illness cover: This includes expenses incurred for treatment of critical illnesses such as cancer, heart disease, and kidney disease.
In conclusion, group health insurance policy provides coverage for medical expenses that may arise due to illness or accidents. It is a cost-effective and customizable coverage option that can be offered by employers/associations to their employees/members and their dependents.
Case Study
The company RN enterprises have more than 500 employees working under them. However, the company offers group medical cashless cover to all its employees up to the extent of Rs. 400,000 per year. The annual premium (Rs. 220,000) is shared equally by both the parties i.e. the employer and the employee.
A travel company is organizing a world tour for a batch of 50 travelers. The tour includes some of the most famous tourist destinations around the world and will take about three months to complete. The company has also bought a group travel insurance which covers all the tourists for multiple hazards while they are on tour.
About The Author
Himanshi
MBA Insurance Management
With over 8 years of dedicated experience in the insurance industry, Himanshi has established herself as a leading expert in group insurance. As a prolific writer for SecureNow, she produces informative and engaging blogs and articles that shed light on the intricacies of group insurance, helping businesses and individuals make informed decisions about their coverage options. Throughout their career, Himanshi has developed a deep understanding of various aspects of group insurance, including employee benefits, policy selection, and risk management. Their expertise allows them to translate complex insurance concepts into clear, actionable insights, making their content an essential resource for readers looking to navigate the world.
