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What are the types of group insurance?

Hello Gnees Army,

Good Morning,

Before we jump over to the types of group of insurance, let’s know what is group insurance? So, basically, Group insurance is a contract between the insurer and a group (it may be a company, organization, or something like that). Usually, term insurance plans are offered as group life insurance plans and so group insurance plans are also called group term plans.

Group Insurance is important to its members when they are diagnosed with an illness or suffer from a partial or total disablement from injury or sickness, or even after the event of their death. During such events Group Life Insurance, Group health insurance, and Group Disability Insurance may help the insured if they are covered for the same. All organizations that have employee insurance are familiar with health or life insurance because it’s the most basic and must-needed insurance for any insured.

One thing here to notice that actually, no one can say these are the types of group insurance. Because there are thousands of types of insurances. Then what to choose? Well, in this post we’re focusing on the top popular types of insurances that are widely used and popular around the world. So, are you ready? Here we go…



 Group Insurance Benefits 

  • Group insurance protects pocket a little bit for the insurer because premium costs are much lower, especially per individual, since no sales commission must be paid to a sales agent, as is usually the case with individual policies.
  • Another reason maybe group insurance costs less is acquisition costs and administrative expenses are lower. Unlike for individual insurance coverage, individual evidence of insurability is usually not required.
  • Tax-free benefits: With some conditions and requirements, tax benefits on the premiums like health or life insurance, are the best to go with Group Insurance.
  • Act as Incentives:¬†These plans can be used as an incentive you provide to your employees.

Read more benefits here: What are the group health insurance benefits?

 How do group life insurance plans work? 

Minimum participation is generally required so that expenses per member can be reduced and because the group is unlikely to have a large proportion of higher-risk individuals. There are basically two types of plans that are seen widely – one is noncontributory plans where the employer pays 100% of the cost, so the insurance coverage can be extended to every eligible employee. But with contributory plans, the employee must contribute at least some portion of the cost, 100% participation is questionable here!

Here, third-party sharing/partnership of cost is also usually required for group insurance, where the 3rd party may be the employer. Otherwise, older members of the group must pay much higher premiums or younger members of the group would be paying much higher premiums than they could purchase individually, but this could cause a drop in their participation. But making it profitable, third-party sharing of costs also increases participation.

In the end, efficient administration-contribution-distribution-management helps to keep participation rates high and expenses low, especially with the payroll deduction of premiums.

 Groups eligibility to buy group life insurance 

Eligibility requirements for group insurance are determined by the insurance company and by state law. Here to notice that not all groups may opt for Group Insurance. Before it, they should meet at least these criteria from the following. This includes but not limited to

  • They must be full-time employees in their respective company/organization for at least 6 months to 1 year. [Varies on work/time]
  • A minimum number of members are required to buy group life insurance is usually 25. But different plans might have a different minimum requirement of members.
  • The bigger the group will, the bigger will be the advantage. Means the more group insurance members will, the more it will reduce the cost and increase the benefit for an individual. Hence, the expenses per group member are proportionately reduced by the size of the group.
  • The policy is issued for one year after which it can be renewed for continued coverage.
  • The sum assured for individuals is calculated based on the age of the members or their annual incomes or their level in that company.
  • The premium can be paid by the group members or partially by the group administrators and the group members.
  • No medical underwriting is usually done for each member of the group. The insurance company underwrites the whole group as one based on the group‚Äôs composition and nature.
  • The probationary period should be registered for employees which usually ranges from 1 to 6 months. Every business, some more than others, has a high turnover of employees, so the probationary period requirement saves enrollment expenses for those who will only be there temporarily.
Types of Group Insurance
Types of Group Insurance

So now we directly jump into the types of group insurance that is widely used and popular.

 Group Health Insurance 

By its name hope you understand what does it mean? Yeah, you guessed it right! A group health insurance contract is purchased between the insurer and the employees of a company for covering their health-related issues like illness, financial help for strong diseases.

Health insurance is one of the most popular insurance amongst all other insurances. As health is valuable than any other things; insurance providers, the government have special focus means provide more benefits on this. Extended Health Care covers the cost (or partial cost) of employees medical care and hospital-related expenses.

Highlights:

  • Medical supplies & equipment
  • Ambulance
  • Semi-private hospital
  • Diagnostic services
  • Home care
  • Hearing aids
  • Cover expenses before and after hospitalization for a certain period.
  • Less than 24 hours hospitalization for certain procedures such as chemotherapy, eye surgery, etc.
  • For some policies, existing illnesses or some diseases may be covered after paying an additional premium.

 Group Travel Insurance 

Group travel insurance protects a group of people travelling together from medical or travel issues. Whether it’s a medical emergency or a financial crisis while travelling, this insurance covers everything. Travel insurance can be divided into two categories: one for international travel and another for domestic travel groups.

Prices and conditions are also varied whether you want travel insurance for a single trip or multiple trips. For international trips, Group travel insurance plays a vital role in case of emergency medical expenses.

Highlights:

  • Emergency hospitalization, medical and paramedical expenses
  • Trip cancellation
  • Repatriation
  • Flight accident
  • Coverage for up to 6 months to 1 year both for a national and international trip.


 Group Dental Insurance 

Along with Extended Health Care, Dental is a category of group insurance which popular and important for all employers as health insurance. In many businesses often see that it has one of the highest usage rates.

Highlights:

  • Annual Dental checkups
  • Teeth cleaning & polishing
  • Teeth related problems like captivity…

 Group Life Insurance 

Group Life insurance is another widely used and popular insurance.  It provides peace of mind for employees by providing financial support when they needed the most for their loved ones in the event of their death. It is intended to give a financial guarantee to the beneficiary covered person by the group life insurance in the event of the death of the insured.

When life insurance is issued for your employees, its coverage help to show that a company cares about employees and their families well being. It also helps to attract and retain top talent for your business. Corporate insurance terms have many attractive features that make ideal for employees.

  • Members can be added anytime in the year
  • In the event of death, the beneficiary of the insured will be paid a pre-determined amount.
  • The application process for group life insurance is quick and easy.
  • This covers a cheaper rate than the individual life insurance policy.
  • Employees can enjoy the benefits they are entitled to while maintaining a healthy and strong relationship with employers

 Group Personal Accidental Insurance 

Another category of group insurance that employers may need is Accidental Death & Dismemberment (AD&D). Like life insurance, it also provides employees or their beneficiaries additional financial support in the event of insured death. But the difference between them is Life Insurance covers death from both natural or accidental causes, whereas AD&D covers death from accidental causes and severe injury to limbs. Death by accidental means –

  • Loss of sight, hearing, or speech
  • The accidental dismemberment of part or all of a limb (i.e. hands, feet, arms, legs, fingers, or toes)

The main motive of group accidental insurance is to provide comprehensive financial support against the high costs associated with disability or accidental injury of employees.¬†It’s helpful to protect employees from certain risks that could lead to death or permanent disability. The multiple benefits of group personal accident insurance plans play a very important role in each individual’s life.

Highlights:

  • The group personal accident insurance covers most accident costs.
  • In the event of the accidental death of the insured, the candidate will be paid 100% of the insured sum.
  • Half of the sum insured will be paid to the insured person if there is a partial disability. In the case of temporary disability, the insured person will be paid a certain percentage of the insured sum.
  • Some policies also provide cover for the injured person’s broken bone, burns, heart attacks, strokes etc as a result of an accident.


 Group Disability Insurance 

Short Term Disability (STD) Insurance and Long Term Disability (LTD) Insurance covers employees in the event of their disability. This may include an extended illness, mental health issues, and/or injury.

Short Term Disability, covers a portion of an employee’s income for a short period of time while they are unable to work (generally between 15 to 26 weeks).

Long Term Disability for a longer period of time for disabilities lasting over 16 weeks.

Disability insurance is intended to replace the disability to income for disabled employees and is paid out to group plan members on a regular basis such as weekly, monthly etc.

Highlights:

  • Covers disability protection for both short and long period.
  • Provide financial support to the disabled during the plan.

There are also other group insurances like Group Pension Plans which is for 65+ years members.

 Quick Replay 

Group Life Cover: This type of policy offers a life cover to each group member (insured). The premium is collected from the group owner which can be deducted from the salary of the employees on a monthly basis.

Group Health Cover: It is to meet the unpredictable medical needs of each group member (Medical Expenses are specified). This plan also covers pre-existing diseases along with the diagnosis costs. In some cases, it covers maternity expenses, visionary treatment, and dental checkups too.

Group Personal Accident Insurance Cover: It compensates the insured group members in case they meet with an accident. Therefore, They have to are in their employment.

Workers Compensation Insurance: This policy covers all the employer’s liabilities under the Workers’ Compensation Act 1987. Employers like the construction units and manufacturing hubs must have this insurance policy, as workers (even if the number is less) operate at a high risk of a fatal accident which causes them partial or even complete disablement of their own-selves.

Group Pension Plans: Pension plans is one of the best insurance covers as they promise a sense of earning safety and security. It promises a regular monthly income after a certain age 60 or 65+ years.

Group Disability Insurance: It covers employees in the event of their disability like extended illness, mental health issues, and/or injury.

Group Travel Insurance: Covers hazards faced by travelers, including theft of documents and luggage. It also includes travel safety for the group members like accident cause on traveling.

 Some Queries 

What is the best insurance plan to select?

The real answer is it varies in many conditions and your needs. But in my opinion, health and life insurance are the best. You can also opt for other insurances as per your requirements.

Can I get more than one insurance in group?

Yes and No. It’s up to your company decisions as it’s group insurance. If they’re providing multi insurances, then you can select from one of them. In another case, you can’t.

Is the amount of money that is assured, restricted under group insurance plans?

Yes, the sum assured under group life insurance plans is restricted. The sum assured is usually determined by the insurance company based on the age, income, or position of the member of the group.

How are premiums for group life insurance plans paid?

Premiums under group life insurance plans are paid in one fixed amount by the group administrator before buying the policy.

Can a member join the policy in mid segment?

Yes, if a new member joins a group midway during the coverage, the member can be added to the policy coverage by paying an additional prorated premium for adding the member.

Can minors be covered under group life insurance plans?

No, minors cannot be covered under group life insurance plans. The minimum coverage age is 18 years.

Frankly to speak, Why we need insurance?

To secure not only your life but also your future generations life.

So hope you have now a few ideas regarding the types of Group Insurance. That’s it for today. Thanks for reading!

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