Whenever anybody mentions ‘group insurance’, we automatically assume they’re referring to an employer and employee. The truth is, the insurance policy can be purchased by any group of people. Housing societies, clubs and cultural associations and even credit card companies can apply for group insurance. If you’re opting for a good policy, the cover will even extend to the dependent family members of each individual covered as part of the group! To better understand these policies, let’s take a look at some important information.
What Is Group Health Insurance?
Let’s start with the basics. Group health insurance is a product that has been designed to provide comprehensive health coverage to all people belonging to a particular group.
How Does Group Health Insurance Work?
For group insurance, a master policy is issued. The policy provides cover to each individual of the particular group. In these policies, the inclusions, exclusions and terms and conditions are the same for every individual who is covered. Based on the needs of the members of the group, it’s possible to create a customised plan for the group as a whole. Generally, the policy will provide a fixed sum assured that will cover the cost of accidental hospitalisation or the medical treatment of specified diseases
Advantages of Group Health Insurance
- 1. Affordable Premiums – According to one study, the premium that an individual pays to enjoy cover under a group plan is about 30% less than what they would pay for an individual plan. Group policies, which offer wholesale insurance, are generally lighter on the pocket than individual health policies. This makes them quite cost-effective – especially if the cover is comprehensive and it extends to your family members.
- 2. No Waiting Period – Once an individual is part of a group policy, they will enjoy cover right from day 1. Unlike with personal health plans, there is no waiting period.
- 3. Cover for Loved Ones – Most people assume that only individuals who have joined a particular group can enjoy cover under these plans. But the truth is the same cover can be extended even to dependent family members. This means group members can also get cover for their spouse, children and perhaps even elderly parents!
- 4. Loyalty Benefit – Group health policies can help motivate members of a group and will encourage them to be loyal. It’s an important incentive that employers and other group managers can offer.
Disadvantages of Group Health Insurance
Honestly, there are no real disadvantages to having a group health insurance plan. Today, if you choose to leave the group as an individual, you can port your policy to an individual plan. This means that you enjoy continuity of cover. But, since you’re now opting for insurance as an individual, you may not be able to enjoy the same coverage as you did under the group policy.
Group health policies have often been misunderstood. In reality, these plans can be extremely beneficial to group members and their families. If you’re already covered under a group plan, or want to purchase a group plan as an employer or group manager, you can take a look at our
Edelweiss group protection policies to learn more.