7 Types of Group Insurance Plans In India

Group Insurance

Your employees are the driving force behind the seamless operations of your business. They bring immense value and can help take your business from 0 to 1. While a salary can compensate for their hard work, an “employee benefits program” can boost their morale and job satisfaction. According to an Assocham study, for every rupee spent on employee benefits, businesses can save up to Rs. 132.33 in absenteeism costs and Rs. 6.62 in healthcare costs.

While employee benefits can be offered in a multitude of ways, one of the most critical components of such programs is group insurance. Group insurance covers a specific group of people and ensures the protection of the group and their dependents in times of need. There are various types of group insurance plans available in India as of today and businesses can customise these group plans that align with their employees’ needs.

In this blog, we’ll walk you through 7 different types of group insurance plans and help you understand which ones of these suit your business requirements the best.

What is Group Insurance?

Group insurance, as the name suggests, covers a specific group of people under a single policy. These types of policies are generally taken to protect employees, associations, welfare groups, etc from unforeseen out-of-pocket medical or accidental expenses. The premiums for such policies are lower than individual policies and can include health, life, accident, and other forms of insurance.

A very interesting benefit that group insurance policies offer is coverage customisation. These customisations can include – a co-pay option, an option to include family members, add-ons, etc.

Classification of “Group” in Group Insurance

Group insurance plan compositions vary for different types of groups depending on their structure and purpose. The two broad classifications are:

1. Formal Group

• A formal group consists of employees of a registered business organisation
• The employer or organisation purchases the policy and the employees leverage the insurance benefits

2. Informal Group

An informal group includes members of associations, clubs, or self-employed professionals who come together to buy insurance as a collective unit

Also read: Types of Health Insurance in India

Types of Group Insurance Plans In India

1. Group Health Insurance

Group health insurance (GHI) provides medical coverage to a group of individuals and mostly these groups are employees of a company or members of an organisation. In a business organisation, it is typically purchased by employers.

However, many group health insurance policies offer the option to both the employer and the employee to make partial payments towards the insurance premium. This is highly lucrative for employees as the individual health insurance policy is more expensive but less customisable.

Employees can get comprehensive health coverage for expenses related to hospitalisation and critical illnesses without having to pay out-of-pocket. A group health insurance policy is the most common benefit offered by employers in India.

Key Features

• Cashless hospitalisation: Employees can get cashless treatment at network hospitals

• Maternity benefits: Most policies come with maternity coverage for both mother and newborn

• Pre-existing disease cover: Unlike individual health insurance, a GHI policy provides coverage for pre-existing diseases from day one

• OPD benefits: Some GHI policies also provide coverage for outpatient treatments

Who Should Buy It?

In the aftermath of COVID-19, the government made it mandatory for organisations with more than 20 employees to provide group health insurance coverage.

However, group health insurance is extremely beneficial for both the employer and the employees, and therefore irrespective of the company size, all businesses should consider getting group health insurance for their employees.

Also read: Group Health Insurance Plans in India: A Buyer’s Guide for SMEs

2. Group Term Life Insurance

Life can be pretty unpredictable and proper financial planning can help people deal with unforeseen circumstances in a better way. This is where a group term life insurance comes in handy. Employers can provide this essential indemnity policy to their employees so that in case of their untimely demise during the policy term, the employees’ families can get proper financial protection.

Group term life policy covers the policyholders for a predetermined policy period and policy benefits can only be utilised during this period. Unlike individual life insurance, group term life does not require individual underwriting, making the policy more accessible and cost-effective.

Key Features

• Lump sum payout: In case of an untimely demise, a predetermined lump sum payout is paid to the employee’s family
• Low premium costs: Premium cost for group term life policy is more affordable than individual life insurance policies
• Customisable coverage: Employers can get coverage based on salaries, fixed sums, or hierarchical slabs

Who Should Buy It?

Group term life insurance is ideal for:

• Large Enterprises: Most large enterprises offer group term life insurance to make a well-structured benefits package and improve job satisfaction.

• Startups & SMEs: Offers a valuable yet affordable benefit to attract and retain talent and build reputation.

• Industries with High-Risk Jobs: High-risk sectors like construction, manufacturing, and logistics where employees face occupational hazards.

3. Group Personal Accident Insurance

Accidental injuries, disabilities, or death are sometimes an occupational hazard. This is where a group personal accident (GPA) policy can provide some financial and mental relief to your employees.

This type of policy covers medical expenses, loss of income caused by temporary or permanent disability, and a lump sum payout to the employees’ family in the event of accidental death. Employers from high-risk sectors should offer this employee benefit to ensure workplace security and financial support during unforeseen accidents.

Key Features

• Accidental death benefit: Provides a lump sum payment to the nominee in the event of an untimely death

• Disability benefit: Replaces the income lost due to permanent or temporary disability

• Hospitalisation coverage: Provides coverage for hospitalisation and ambulance charges arising out of an accidental injury

Who Should Buy It?

Group personal accident Insurance is most beneficial for:

• Manufacturing & Industrial Units: Covers employees exposed to hazardous work environments.

• Construction & Real Estate Companies: Protects workers at high-risk sites that are prone to accidents.

• Logistics & Transportation Businesses: Provides security to drivers and delivery personnel who are frequently on the move.

Also read: Top 5 Group Health Insurance Companies

4. Group Travel Insurance

Many organisations require employees to frequently travel for business purposes and buying individual travel insurance for each occasion can be a cost-intensive effort. This is where group travel insurance can provide financial protection to your employees whenever they are travelling for work-related events.

It covers medical emergencies, trip cancellations, loss of baggage, and other travel-related risks.

Key Features

• Customisable coverage: Employers can configure the policy based on travel frequency and the nature of business trips

• Emergency medical assistance: Provides cover for hospitalisation, medical expenses, and emergency evacuation during travel

• Baggage loss: Offers compensation for lost, stolen, or delayed baggage and offers aid for passport replacement

• Flight delay benefit: Covers additional costs due to delays or missed flights

Who Should Buy It?

Group travel insurance is suitable for:

• Multinational Companies (MNCs): Companies with global operations requiring employees to frequently travel overseas.

• Export & Import Businesses: Businesses that are engaged in international trade and send employees abroad for negotiations and deals.

5. Workmen Compensation Insurance

Workmen compensation insurance covers employers’ legal liability to pay compensation to their employees in case of a work-related accident or occupational hazard or illness. It ensures that employees receive compensation for medical expenses, lost wages, and disability benefits.

Although it sounds similar to Group Personal Accident insurance, workmen compensation has a different scope and coverage.

Key Features

• Reimbursement for medical expenses: Covers hospitalisation, treatment, and rehabilitation costs

• Disability benefit: Offers financial assistance for temporary or permanent disability

• Compensation for loss of life: Provides monetary benefits to the employee’s family or nominee in case of an accidental death

• Legal liability protection: Covers the employer’s legal liabilities as per the Workmen’s Compensation Act of 1923

Who Should Buy It?

Workmen compensation insurance is mandatory for businesses with manual labourers working in hazardous conditions.

6. Group Pension Scheme

The group pension scheme is an employer-sponsored retirement benefit that can help employees accumulate a hefty financial corpus for their post-retirement years. The employer makes a regular contribution to this type of scheme and it is then invested in various wealth-creation instruments. The group pension corpus can either be taken out in periodic payouts or as a lump sum amount upon retirement.

Key Features

• Flexible payout options: Employees can either receive a steady and periodic pension or withdraw a lump sum amount upon retirement

• Employer contribution benefits: Can be structured as an employee-only contribution or as a combination of employer and employee contribution

• Long-term wealth accumulation: Helps employees save and accumulate a large corpus for retirement years

Who Should Buy It?

A group pension scheme is ideal for businesses where the average employee age is above 35 years. It can offer long-term financial security to employees. Additionally, a group pension scheme is mandatory for public sector organisations.

7. Public Liability Insurance

Businesses that are at high risk of incurring financial liabilities arising from third-party claims can benefit from public liability insurance. This prevents them from claims made by customers, visitors, or another third party, due to injury, property damage, or accidental death caused by business operations.

Key Features

• Covers legal expenses: Provides cover for legal fees, court expenses, and settlements of liability lawsuits

• Compensation claims: Provides monetary compensation to beneficiaries in case of accidental death

• Damage settlements: Covers damages caused to a third party’s property due to business operations

Who Should Buy It?

Public liability insurance is important for businesses that interact with customers, suppliers, or the general public on the daily. Some of these businesses are – retail shops or malls, restaurants, manufacturing units, factories, and healthcare facilities.

Quick read: Top 5 Group Medical Insurance for Family

Benefits of Group Insurance For Employers

1. Increased Productivity

Various findings have attributed an increase in productivity to employee benefits and financial security. A workforce that is healthy and financially secure is more focused on work and contributes more productivity and efficiency.

Group insurance provides employees a financial cover for various uncertainties preparing them better and reducing their overall stress and financial burden.

2. Increased Employee Satisfaction

Group insurance also improves employee morale and job satisfaction. Many job seekers look for opportunities that offer better benefits over the take-home salary component. By providing insurance coverage to employees, businesses foster a culture of well-being and support.

Additionally, comprehensive coverage can help employees feel cared for and financially secure, making them more loyal to their organisation.

3. Tax Saving

Group insurance policy is considered a business expense and is therefore tax-deductible under section 37(1) of the Income Tax Act. This reduces the overall tax liability of the employer and makes the policy purchase a more lucrative option.

4. Lowered Attrition

Employees who are offered a strong benefits package that includes group insurance and wellness benefits are less likely to switch jobs than the ones who don’t get group insurance coverage. This bears a direct correlation to attrition, as businesses offering comprehensive benefits experience less turnover and have a more dedicated workforce.

5. Better Talent Retention

Not only can group insurance help retain talent, but it also plays a pivotal role in attracting highly skilled professionals who fit well with the role requirements. According to various reports, the cost of a bad hire can be as high as Rs. 20 lakhs.

Businesses can easily offset this by introducing a solid employee benefits package. Now that you know the innumerable benefits that group insurance and employee benefits offer, let’s dive into different types of group insurance plans that are available in India today and whether they are suitable for your business requirements.

Suggested read: Benefits of Group Health Insurance

Customising Group Insurance & Employee Benefits With Onsurity

Building an effective employee benefits program requires customising group insurance policies to fit workforce needs. Onsurity offers flexible insurance solutions tailored for businesses of all sizes.

By partnering with Onsurity, businesses can:

• Provide Affordable Healthcare Solutions – Budget-friendly group health plans for startups, SMEs, and large enterprises.

• Ensure Comprehensive Employee Wellness – Access to health check-ups, doctor consultations, and wellness perks.

• Simplify Insurance Management – A seamless digital platform for easy enrollment and claims processing.

• Offer Scalable Coverage – Customised insurance packages that grow with the company’s workforce needs.

Make an employee benefits package worth bragging about, and get comprehensive group insurance coverage for your team.

Get in touch with Onsurity to get a custom quote today!

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