How To Choose The Best Group Insurance For Employees In India?

In India’s corporate landscape, group insurance is often limited to health and accidental coverage. However, the scope and application of group insurance for a formal group, such as – a group of employees is varied and encompasses coverage beyond basic healthcare costs. Group insurance provides uniform coverage to a well-defined group of people, typically, employees of an organisation or members of a specific society.

This type of policy offers financial security to said groups and due to the risk mitigation advantage, the premiums for these policies are lower than individual insurance policies. There are many types of group insurance plans available in India that protect employees against financial and medical threats, during treatment or in an unfortunate circumstance resulting in death or disability.

Employers provide group insurance policies as part of their employee benefits package. Speaking about the current corporate landscape in India, these employer-sponsored group insurance plans generally contain basic health insurance and accidental coverage that barely covers the in-patient medical costs.

But merely providing a government-mandated health insurance policy is not enough in today’s world. Since the pandemic, the focus has shifted toward holistic wellness, with individuals becoming more concerned about their health and healthcare needs. According to a survey conducted on 1 million workers across 3,100 organisations, more than 75% of employees want to work for organisations offering a comprehensive benefits package. This and the ever-rising medical inflation are why employers need to consider a more proactive approach to building a group insurance policy for their business.

So, if you are wondering what kind of group insurance plan to offer to your team, then do give this blog a read, as we take you through the importance of providing group insurance, the benefits they bring to your business, and different types of group policies that you can add to the mix.

What Is Group Insurance For Employees In India?

In India, a group insurance policy is typically purchased by an employer to provide coverage for their employees. Most group policies include health, term life, and personal accident coverage. However, there are more than 7 types of group policies that serve the specific needs of businesses.

For example, a manufacturing business may also benefit from providing workmen compensation to their workers. Or a consulting firm operating globally can provide travel insurance to their employees. Mostly, these policies have the following common features

• Coverage: Group insurance policies generally include employees, and occasionally, their family members. 

• Providers: Group policies can be purchased from corporate healthcare providers and insurance companies. However, there are many new-age digital insurance providers available today that ensure seamless and paperless onboarding with a mobile-friendly experience.

• Benefits: The benefits of group insurance policies can usually be availed during medical emergencies resulting in hospitalisation, accidents resulting in disability, or loss of life.

Also, read: Top 5 Group Health Insurance Companies in India

Key Features Of Group Insurance

Group insurance plans come with distinct features designed to benefit both employers and employees. Here are some of the key features that can be taken into account while purchasing your next group policy:

1. Single Policy, Multiple Beneficiaries

A group insurance is a single policy covering all members of the group. Members are not issued separate policies but are granted the same benefits as detailed in the master policy.

2. Cost-Effective

Due to the risk pooling of a group consisting of various members, the group policy premiums are considerably lower compared to an individual policy.

3. Simplified Underwriting

The underwriting is seamless and less taxing, as no individual medical examinations are required. This makes the policy issuance faster.

4. Employer Sponsored

 As already mentioned, group insurance is provided by employers to their employees as part of the benefits program, and therefore, the premium is usually paid by them. This either eliminates or reduces the cost burden on the individuals.

5. Standardised Coverage

While many group insurance policies offer add-ons and customisations, the primary benefits and coverage are uniform for all members.

6. Coverage for Dependents

More often than not group insurance extends policy benefits to employees’ family members. If not provided by the employer, then the employee always has the option of adding dependents at a nominal cost.

7. Wide Range of Benefits

Most types of group insurance policies offer benefits pertaining to health, life, disability, and travel. Employers can offer additional wellness benefits like mental health support, dental care, OPD coverage, and telemedicine.

8. Tax Benefits 

Premium paid by the employer for group insurance is considered a business expense and is therefore deductible under section 37(1) of the Income Tax Act.

Related Read: Section 37 of the Income Tax Act

Types Of Group Insurance Plans In India

While there is a plethora of group insurance plans available in India, we have mentioned below some of the most common ones…

1. Group Health Insurance

Group health insurance covers medical expenses for hospitalisation, ambulance, and in-patient treatment of the employees and occasionally their family members. Unlike the individual health insurance policy, group health policy benefits can be availed from day one, as there is no waiting period, and the coverage is also provided for pre-existing conditions. Another great feature of a group health insurance plan is that network hospitals can offer cashless treatment.

Additionally, group health insurance is company-sponsored, so the employees are not required to bear the premium costs. Making quality healthcare accessible and affordable for them. Organisations providing comprehensive health insurance coverage to employees have recorded higher productivity and morale, making group health insurance a must-have addition to the employee benefits package.

Also Read: 10 Reasons Why Companies Should Offer Health Insurance To Employees

2. Group Term Life Insurance

Often a complimentary addition to the employees’ health insurance policy is the term life insurance. Term life cover offers financial security in the form of a lump-sum payout to the employees’ families in case of their untimely demise. It is a pure protection plan and does not include savings or investment components. Much like in group health insurance, the premium for group term life insurance is also lower than individual life insurance due to the risk pooling of a group.

The policy coverage amount can be uniform or can be categorised based on different seniority levels (for example – 1x or 2x of the annual salary). Optional features under this policy are coverage for outstanding loans, critical illness riders, and disability benefits for the insurance beneficiaries.

3. Group Personal Accident Insurance

Another group insurance that helps protect employees in unforeseen circumstances is the group personal accident insurance. This type of policy provides employees financial protection against accidents leading to critical injuries or death. Additionally, a GPA policy also covers medical expenses incurred from hospitalisation due to the accident.

In case of an accidental death or permanent and partial disability of an employee, the lump-sum amount covered under the GPA policy is paid to the dependents. Although it sounds very similar to group health insurance, personal accident coverage is only provided for employees, where the sum insured is a fixed amount that is paid in whole and not reimbursed to cover specific healthcare expenses.

A group personal accident insurance is most suitable for high-risk sectors where employees may be exposed to unintentional physical threats. For instance, employees working in the mining or construction sector are most likely to benefit from a GPA policy.

4. Group Travel Insurance

Now, there are many reasons that can require employees of an organisation to travel domestically or overseas; be it for an important business event or a company offsite, the best way businesses can ensure hassle-free and cost-effective travel is by ensuring that the employees remain protected in any unforeseen circumstance resulting in financial loss or medical emergency.

This is when getting a group travel policy comes in handy. Employers can provide coverage for a large group of employees under a single policy and pay only one-time discounted premium rather than getting several single-trip policies.

A group travel policy provides coverage for trip cancellations, medical emergencies, and loss of baggage.

Recommended read: 7 Types of Group Insurance Plans in India

How Group Insurance Works?

Most group insurance plans cater to different types of groups, including corporate, social welfare or professional associations, and trade groups. But the most common application of such group policies is for businesses with employees of more than 20 people.

Both businesses and employees can enjoy the benefits of group insurance, where the employees get the financial security without having to pay out of pocket and employers get to create a thriving work culture with highly dedicated and productive teams.

There are however various factors that can impact the composition and premiums of the group insurance policies. Some of these factors are:

• Number of employees covered under the policy
• The average age of the organisation. Usually, younger teams attract lower premiums
• Risk levels associated with the business. The higher the risk, the higher the premium cost!
• Claims history can also impact the renewal costs
• Rider benefits like maternity and critical illness coverage can also impact the premiums

Also, read: Tax Benefits of Group Health Insurance

How To Choose The Best Group Insurance For Employees?

While putting together a group insurance plan for employees, it is extremely crucial for HRs and relevant decision-makers to take into account the specific needs of their team, the coverage inclusions and exclusions, and the sum insured being at par with the industry standards.

To simplify the decision-making process we have identified the following measures and steps:

5 Group Insurance Terms You Must Know Before Buying

1. Coverage

Coverage entails the risks, events, and scope of protection the insurer agrees to pay for against the insurance policy. It covers the details of the policy benefits, exclusions, and inclusions for which the policyholders can make a claim.

2. Sum Insured

A sum insured is the maximum amount the insurance provider agrees to pay the policyholder in case of a claim; the amount is determined by the plan selection made by the employer. According to a recent study, the median sum insured for group health insurance policies in India is Rs. 5 lakhs.

3. Claim Settlement Ratio

The claim settlement ratio is a very crucial factor that businesses should take into account while buying group insurance policies as it indicates the reliability and efficiency of the insurer in providing claims.

4. Co-Payment

Co-payment or commonly known as co-pay, is a common cost-sharing method that is used to reduce the cost of insurance premiums. It is when the policyholder opts to bear a certain portion of the claim amount while the insurer agrees to bear the rest.

Now, in the case of group health insurance, the policy is bought by the employer, and therefore, the employer can opt to add the co-payment clause to reduce the premium. In such a situation, the employee, who is the policyholder, will have to bear the partial cost of the claim.

5. Network Hospitals

Network hospitals are the healthcare providers that partner with the insurers to provide insurance benefits to the policyholder. Any treatment or procedure done at the network hospital by the policyholder can be claimed immediately as a cashless treatment or can be later reimbursed by the insurer.

While buying a group insurance policy, it is important to go with an insurer that has a large network of hospitals offering cashless treatment.

Quick read: Annual Health Checkups for Employees in Group Health Insurance Plan

5 Mistakes To Avoid While Picking Group Insurance

• While buying a group insurance policy, employers should refrain from opting for a plan offering limited coverage, as they may not be able to cater to the diverse needs of the employees, therefore creating a negative experience for both the employer and the employee. 

• It is not advisable to settle for insurers with a known history of providing poor customer support. Quick and round-the-clock support comes in handy while managing claims, and it can potentially reduce manual to-and-fro for the admins, saving crucial business hours.

• Caring for your team’s well-being is a noble cause, and providing comprehensive healthcare coverage is the best way to show it. So, while selecting the insurance policy for your teams, you should carefully review the policy documents to check for any critical exclusions. For example – if your team has a majority of female employees, then excluding maternity benefits can create a negative experience, and it is best to take into account your team’s specific needs while looking for exclusions and inclusions of the group policy.

• A policy with limited geographical reach can go in vain, so it is important to ensure that the plan you purchase offers coverage across India and is not limited only to certain geographies.

• Buying a group insurance plan is a tactical business decision, so it is extremely crucial to take into account the cost benefits of the policy. Avoid paying high premiums for basic coverage. Compare different plans from various insurance providers to find the one that suits your requirements the best and also offers affordability.

Also, read: Employer Employee Insurance

5 Factors To Consider Before Buying Group Insurance

• Offer customisation and flexibility to suit your employees’ specific needs

• Look for a policy that is advantageous to both you and your team. If you want to understand the various benefits of a group insurance policy, then do read this blog

• Always compare different policies before settling for one; reviewing the coverage, plan type, exclusions, and sum insured under various policies helps you determine what would work best for your organisation

• Opt for an insurance provider with a high claim settlement ratio. An ideal claim settlement ratio ranges between 80% – 99%

• Most group insurance policies offer zero or no waiting period, but it’s always best to check before opting for a policy. You would ideally want to go with a policy that has no waiting period and extends coverage from day one

Conclusion

To sum it all up, a group insurance policy for your team not only helps your employees in times of distress but also contributes positively to your business growth. And if you are looking for the most comprehensive group insurance plan for your team, then look no further!

Onsurity simplifies group insurance by offering customisable, affordable plans tailored for your workforce. With extensive coverage options and efficient claim processes, Onsurity has successfully insured 8,000+ businesses and 15 Lakh+ members, enhancing workplace healthcare accessibility.

Explore Onsurity’s plans today and ensure your employees are covered, wherever they are.

FAQs