Group insurance policies can be a game-changer for startups in India, offering necessary financial security to their employees. Not only do these plans act as an attractive employee benefit, but they also show that the startup truly cares about its employees’ well-being, leading to increased loyalty and motivation. In other words: group insurance = win-win.
However, selecting the right group insurance plan can be challenging for startups as they may need more experience and knowledge about insurance products. Startups also need to consider the cost and coverage of insurance plans while ensuring that the same aligns with their overall business objectives.
What are group insurance plans?
Group insurance plans are policies that offer coverage to a group of individuals, for example, employees of an organization. These plans provide financial protection to employees and their families in the event of sickness, injury, or death. Whether a group plan covers an employee’s family depends on the plan bought by the employer and the inclusions in the plan.
Such plans also benefit employers by helping attract and retain talented professionals and fostering a sense of loyalty and motivation among employees. Employers can also enjoy tax benefits and lower premium rates by offering group insurance plans to their employees.
Here are the commonly offered group insurance plans:
1. Group health insurance plans
A group health insurance plan offers coverage to all members of the group, which often results in lower costs for individuals compared to purchasing an individual health insurance policy.
Group health insurance plans usually cover a range of medical expenses such as hospitalization, doctor visits, diagnostic tests, and prescription drugs. The specific coverage and benefits provided by a group health insurance plan can vary depending on the plan’s terms and the insurance provider.
Startups should look for group health insurance plans that are flexible and customizable to meet the needs of their employees.
2. Group life insurance plans
A group term insurance plan is a type of life insurance policy that provides coverage to a group of people. The coverage is provided for a specified term, usually one year, and the policy only pays out a death benefit if the insured person dies during the term of coverage.
Group term life insurance plans are often used as an employee benefit to provide financial protection for employees and their families in the event of the employee’s death. The coverage amount is usually a multiple of the employee’s salary, and the premiums are typically paid by the employer.
Group term life insurance plans do not accumulate cash value over time, and the coverage ends when the term of the policy expires. These plans generally do not require a medical exam to enroll, but employees may need to provide evidence of insurability if they want to increase their coverage amount.
3. Personal accident insurance plans
A group personal accident insurance plan is a type of insurance policy that provides coverage to a group of people against accidental injuries and death. The policy is designed to protect members of a group, such as employees of a company or members of an organization, against the financial burden that may arise from unexpected accidents.
The coverage provided by a group personal accident insurance plan may vary depending on the specific policy and the insurance provider, but typically includes:
- Accidental death: The policy pays out a lump sum to the beneficiaries of the insured person in the event of their death due to an accident.
- Accidental injury: The policy provides coverage for medical expenses incurred as a result of an accidental injury. This may include hospitalization, surgery, and other necessary medical treatments.
- Permanent disability: The policy may pay out a lump sum to the insured person in the event of permanent disability due to an accident.
- Temporary disability: The policy may provide a weekly benefit to the insured person for a certain period of time in the event of temporary disability due to an accident.
What should be considered while choosing an insurance plan for your startup?
Start-ups should consider the following when choosing a group insurance plan:
- Features: Different plans offer different features including insurance, wellness benefits like health check-ups and fitness programs, which can aid overall employee well-being.
- Coverage: Start-ups should choose a plan with wide coverage while taking into account the sum insured, waiting periods, inclusions, co-payment, and deductions.
- Cost: Cost is a critical factor for start-ups, and they can save money by choosing affordable group insurance plans designed specifically for them. The cost can vary depending on the type of coverage, the size of the group, the age and health of the employees, and the claims history (if the start-up is not a first-time buyer of group insurance).
Companies like Onsurity cover teams with as few as 3 employees. If you are a SME or start-up with a small team, you too can offer the necessary insurance benefits to your employees.
You could also buy customizable group insurance plans that cater to the unique needs of your employees. Start-ups can align their requirements with their business objectives and nature of employment of employees (freelancers, contractual workers, consultants etc) to secure favourable rates.
What types of group insurance plans are available in India?
In India, you have the option to buy one of the below mentioned plans:
- Insurance-only plans: If it’s only a health insurance plan, it will cover the cost of hospitalisation and other associated expenses. You could also offer group term and group personal accident insurance.
- Insurance plans with wellness benefits: These plans offer insurance along with benefits such as fitness programs, health check-ups, and mental wellness.
Start-ups should evaluate the different types of group insurance plans available and choose a plan that best suits their employees.
What are the implications of not offering group health insurance?
- Difficulty attracting and retaining talent: Now more than ever, employees have started placing a high value on health insurance benefits, and not offering group health insurance can make it harder for a business to attract and retain top talent.
- Reduced employee morale: When employees are not provided with health insurance benefits, they may feel undervalued and unappreciated, leading to lower morale and reduced productivity. This is especially true when most companies around them proactively offer group health insurance benefits.
- Increased employee absenteeism: Without access to health insurance benefits, employees may delay seeking medical treatment or preventative care, leading to higher rates of absenteeism due to illness.
- Financial burden on employees: Without access to group health insurance, employees may be forced to pay for medical expenses out of pocket during hospitalisation, which can be a significant financial burden.
Startups are almost always juggling resources and looking for ways to optimize their bottom-line. By choosing a comprehensive group insurance plan, you can tap into cost savings while providing your employees with the benefits they need the most.
Onsurity offers comprehensive plans that won’t break the bank, plus our experts will guide you in understanding all your options so everyone is taken care of seamlessly.