Health Insurance

What Is Group Medical Insurance

Keeping in mind the importance that is given to health in today’s times, most of you must be aware of the concept of health insurance. But do you know what is group health insurance? Let us answer that for you.

What is group medical insurance?

Group health Insurance, also known as group medical insurance or group Mediclaim policy, is a type of health insurance that provides financial protection against medical expenses to people belonging to the same group. Most commonly, these people are employees or members of an organisation.

Companies buy group health insurance plans and offer them to their employees as an added benefit. The cost of premium is borne by the employer and not by employees. Sometimes the cost is shared.

Like other health insurance policies, group health insurance also provides coverage against accidental injuries and medical illnesses that involve hospitalisation, surgeries, doctor’s consultancy charges etc. But its specific features and coverage may vary depending on the insurer and the health plan chosen by the employer.

Additionally, group Mediclaim policies usually cover immediate family members of the employees, serving the purpose of a family floater plan. Some policies might also give employees the option to add extra benefits by paying an additional premium from their own pockets.

How does group health insurance work?

Now that we know what is a group health insurance plan, let’s see how it works. Group health insurance plans are specially designed for companies or organisations and can only be bought by them. Individuals cannot buy group health insurance plans.

The most salient feature of a group health insurance plan is that its premium is usually much lower than that of individual plans with similar benefits. This is because these policies are bought in bulk and, hence, the risk for the insurer is spread across a higher number of people.

The sum insured in a group health insurance policy depends on the insurer and plan chosen by the company. It is mostly fixed and uniform for all employees of the organisation. However, some companies might choose to offer health policies where the sum insured is based on the employee’s salary package.

For companies, the key purpose behind offering free health insurance is employee retention. Group health plans can be treated as an incentive for workers and also reduces the company’s liabilities in case of any unfavourable incident.

Besides, companies offering employees health insurance benefits are also entitled for income tax benefits. The money paid toward employee premiums is usually tax–deductible.

Advantages of group health insurance:

  • As mentioned before, group health insurance is like free insurance policy for workers and their families. It is especially helpful for people who cannot afford a healthcare policy and its premiums

  • There are people who can afford to buy a health cover but are plain lazy or ignorant to buy any sort of health insurance. Group medical policies automatically bring such people under the insurance net. You just need to be an employee of a company and you will automatically get covered in a group health insurance plan.

  • The claim process of group health insurance policies is usually much more streamlined and hassle–free. Whenever the need arises, the company communicates with the insurer or third-party administrator (TPA) on the behalf of employees and gets the claims settled as soon as possible.

  • Unlike individual health policies, group medical policies usually do not require any pre-policy health check-ups.

Disadvantages of a group health insurance plan:

Even though group health insurance policies may sound like a win-win for both companies and their employees, there are some disadvantages of these plans that you should be aware of.

  • The coverage offered by a group health insurance plan is usually very basic (in terms of diseases or illnesses covered or in terms of sum insured). Hence, it may prove to be insufficient for you and your family. So, it is not wise to completely rely on a group health insurance policy for your healthcare expenses.

  • The biggest disadvantage of group health insurance is that it will provide you coverage only till the time you are a part of the organisation. As soon as you resign or retire or your services are terminated, your insurance policy would be cancelled. So, if you are someone who switches jobs too often or is about to retire in the near future, it is better to have your own individual health policy along with group health insurance.


Group health insurance plans can provide an affordable health cover to a large section of people. But they should not be considered as a replacement of individual health policies. Rather, the ideal situation would be to own an individual health policy that fills in the gaps left by the group health insurance plan, in order to ensure adequate coverage for the entire family.


The above information is indicative in nature. For more details on the risk factor, terms and conditions, please refer to the Sales Brochure and Policy Wordings carefully before concluding a sale.

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