What is Group Insurance – All You Need to Know
Health Insurance

What is Group Insurance – All You Need to Know

Organisations take several initiatives to boost the morale of their employees and ensure their well-being. One such measure is providing them with group health insurance. As the policy is bought by the company, the employer bears the insurance cost, while employees can enjoy the coverage benefits. The coverage is similar for all employees with a uniform sum insured amount. If you want to know what group medical insurance is, read on to get your answer.

What is a group health insurance plan?

Group health insurance is a type of medical insurance coverage that secures a group of people, specifically employees of a company or members of an organisation. With a group health insurance plan, as an employer, you can cover multiple members of the company, which pools the risk and spreads the insurance cost. For the employees, the policy provides coverage against medical expenses incurred on doctor’s consultations, hospitalisation, surgeries, and more. The scope of coverage depends on the sum insured and specific features in the type of policy chosen by the employer.

How does the policy work?

Under a group health plan, the employer selects a standard medical insurance policy that employees can encash to treat various medical conditions. The employer bears the cost of premiums, offering the policy as a perk for being a part of their organisation. In some cases, the insurance costs are partially shared between employers and employees.

When employees need to use their medical policies, they simply need to inform the insurer and seek admission in a hospital. They must present their insurance card or employee ID number to the healthcare provider. Employees have the option to seek cashless treatment at network hospital or at their preferred healthcare centre, and file a reimbursement claim later.

Eligibility criteria for buying a group health plan

The standard eligibility criteria to qualify for group health insurance coverage are:

  • Indian citizenship
  • Employees aged between 18 to 65 years.
  • The company offering group health insurance must have at least 20 employees.

Note: The eligibility criteria may vary from one insurer to another. Employers seeking to provide group health coverage must check the same on the insurer’s website or contact them for more clarity.

Factors to consider while buying a group health insurance policy

Now that you know what group health insurance is, you can consider the following factors to make an informed buying decision:

  • Coverage and wellness benefits

  • While deciding on a group health insurance policy, it is important to select sufficient coverage to address the average medical expenses of your employees. You can consider the demographics of employees to determine the suitable coverage. Additionally, you can look into wellness benefits like free consultations, mental health counselling, discounts on laboratory tests, etc.

  • Customer support

  • The quality of customer support provided by the insurer plays a crucial role, especially when filing claims during medical emergencies. Hence, it is critical to evaluate the responsiveness, availability of helplines, and online assistance for clarification or doubts or to address concerns. You can check this aspect to choose the right insurance provider.

  • Network hospitals

  • Insurance companies tie up with hospitals to form a cashless network, thereby facilitating smooth claim settlement. The policyholder can simply get admitted to one of the network hospitals, and the billing process is carried out by the insurer. This eliminates the hassle of clearing bills. As the sponsor of the policy, employers should check if the hospital network affiliated with the insurer is wide enough.

  • Claim settlement ratio

  • Claim settlement ratio refers to the percentage of claims that an insurance company successfully settles against the number of claim requests received. It is a measure of how effectively an insurance company processes claims. Comparing insurers based on their claim settlement ratio ensures efficient and hassle-free claim processing.

  • Policy limits

  • Reviewing the policy limits gives you clarity on the scope of coverage. Policy limits include exclusions, room rent limit, sub-limits for specific treatments or services, and the maximum sum insured amount. You can check these limits to ensure the coverage adequately meets the healthcare requirements of the employees and minimises the chances of unexpected financial burden.

How do you buy it?

You can follow the steps mentioned below to buy a group medical plan online and offline:

Online process

  1. Research and compare different insurance providers online.

  2. Visit the official website of your chosen insurance company.

  3. Select the group health insurance plan.

  4. Provide details about your company strength, demographics, age groups, and other requested information on the online application form.

  5. Customise the plan by selecting the desired coverage options, policy limits, etc.

  6. Review the insurance quote and policy terms carefully.

  7. Once satisfied, pay the premium amount via online payment modes.

  8. After processing your payment, the insurer will send you the policy documents via email.

Offline process

  1. Reach out to your preferred insurance company via phone or email to inquire about the group health insurance plan.

  2. Schedule an appointment with the insurance representative to discuss your requirements and explore suitable options.

  3. Fill in the physical form with the required details of employees.

  4. Coordinate with the insurance representative to customise the plan based on your requirements.

  5. Review the proposal, which includes the coverage details, premium amount, and policy terms.

  6. If you have queries about the proposal, you can get them resolved through the insurance representative.

  7. If you are satisfied with the policy terms, make the premium payment to finalise the buying process.

  8. After processing your payment, the insurer will send you the policy documents physically or via email.

Advantages of group health insurance

Some of the notable benefits of group health insurance are as follows:

  • No pre-medical health check-ups

  • When applying for a group health insurance policy, you will not come across a pre-medical health check-up requirement, which is generally the case with most health insurance plans. With no health check-up requirement, the group health insurance buying process is simplified and hassle-free. The employees need not go through the formality to get coverage.

  • No Streamlined claim process

  • The claim process in group health insurance is streamlined owing to various efficient services offered by the insurance provider. The cashless facility helps employees get medical attention without the hassle of paying bills. Besides, insurers have robust websites and interactive apps that make it easier to file claims and get prompt assistance.

  • Tax benefit for employers

  • The Income Tax Department allows employers to claim tax deductions for providing group health insurance coverage to their employees. Hence, a group health insurance policy proves to be a tax-saving investment for companies. The premium paid towards the group health plan can be specified as a business expenses in the company’s profit and loss statement to claim tax deduction.

  • Default healthcare coverage for employees

  • As an employee, you need not initiate the group health insurance buying process, neither do you have to pay the premium. All the formalities are carried out by the employer. You get the insurance coverage as a default benefit for working in the company. You can enjoy the coverage benefits until the time you are employed with the organisation.

  • Cost-effective investment

  • As the coverage in group health insurance is spread across a group of employees, the risk is shared across a larger group. Hence, insurance companies offer a lower premium on group health plans compared to individual insurance plans. Besides, non-consideration of the pre-existing illnesses of the employees before buying the policy further reduces the insurance cost.

Group insurance – what is the right way to go about it?

Now that you have a clear understanding of what group insurance is and the numerous benefits it entails, you can consider exploring its potential for your own organisation. The SBI General Group Health Insurance Policy provides excellent coverage, covers the cost of nursing expenses, provides individuals with tax exemptions and also does not require a medical check-up up to 65 years of age. Learn more about the Group Health Insurance Policy here.


Who can purchase a group health insurance policy?

Any organisation with a team strength of 20 or more employees can purchase group health insurance plans to cover the medical needs of their organisation's members. Thus, companies can buy a group health plan for their small-scale enterprises, medium-sized businesses, or a large-scale organisation. They can check their chosen insurer's eligibility criteria for more clarity.

If I am covered under a group health coverage, can I still buy individual health insurance?

Yes, you can. If you feel that the coverage under the group health insurance plan is insufficient, you can opt for an individual health insurance policy. This way, you can enhance your coverage with a higher sum insured, which proves valuable during long-term ailments. Plus, you can customise the individual health insurance plan with add-on riders.

What is covered under group health insurance plans?

The extent of coverage under group health insurance plans typically mirrors regular health insurance policies. It includes a range of healthcare services, such as doctor visits, hospitalisation costs, prescription medications, preventive care, etc. Some policies also come with specialised coverage for eye and dental treatment.

What is group insurance premium?

The group insurance premium is the amount paid by the employer to cover the insurance coverage costs of their insured employees. In the case of a shared premium, both employers and employees partially pay the insurance premiums. The premium is typically paid while buying the policy and renewed every year to keep the policy active.

What happens to group insurance coverage when the employee leaves the company?

When an employee leaves the company, the group insurance undergoes a change. In most cases, the group insurance coverage is ceased after the employee's termination. However, if the employee chooses, they can continue the coverage. They can do so by converting the group health policy into an individual health insurance plan. The possibility depends on the company's and insurer's terms.

Do group health insurance plans cover employees' specific medical needs?

The medical needs covered under a group health plan depend on the type of coverage chosen by the employer. As an employee, you can check the coverage under the group health plan and assess if it aligns with your healthcare requirements. If not, most insurers provide the option to upgrade the policy. Alternatively, you can invest in an individual health insurance policy separately.

Is my family covered under group health insurance?

Whether or not your family is covered under group health insurance depends on the policy's terms. Most group health insurance plans cover family members, including the employee's spouse, parents, and dependent children. Other plans may consider the ages of all family members, thus restricting coverage if their age exceeds a threshold.

Disclaimer: 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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