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Group Insurance: Types of Group Insurance Plans in India

Team AckoJan 17, 2024

The term Group Insurance refers to an insurance plan covering a group of people, typically the employees of an organisation or members of an association. The coverage benefits are as per the policy statement issued to the employer or an association. The group insurance plan can be a health insurance policy, life insurance policy or any other type of personal insurance policy. In this article, let’s throw light on the types of group insurance plans available in India.

Contents

What is Group Insurance?
- Types of Groups
Classification of Group Insurance Plans:
Types of Group Insurance Plans available in India:
Frequently Asked Questions
View Infographic: Types of Group Insurance Plans

What is Group Insurance?

A group insurance plan meets the insurance needs of a group of people. Typically, an employer/association opts for such an insurance plan to insure the employees or members. There are different types of group insurance plans available in India, including health insurance cover, personal accident cover, travel insurance and many more. Also, there are a few types of group insurance plans that provide life cover. However, in this article, let’s look at the insurance plans under the General Insurance category.

Types of Groups

Before divulging the types of group insurance plans available in India, it's essential to know the types of groups that can benefit from a group insurance policy. In India, there are mainly two types of groups: Formal Groups and Informal Groups. Below are the details of both types of groups.

Formal Groups (Employer-Employee): These groups are mainly companies or organisations wherein the employer purchases the insurance plan to insure the organisation's employees.
Informal Groups (Non-employees): These groups include members from cultural, social or welfare associations. Generally, the group administrator or head of the association buys the group insurance policy to insure the members.

Classification of Group Insurance Plans:

As mentioned earlier, several types of group insurance plans are available in India, ranging from health insurance to life insurance. However, group insurance plans can be broadly classified into two types: Non-contributory and Contributory. Below is a detailed explanation of both types of group insurance plans.

Non-contributory: In this type of group insurance plan, the group members or employees need not pay the premium to avail of the policy benefits. For instance, if the employer pays the premium for the employee's insurance cover, it is one example of a non-contributory group insurance plan.
Contributory: As the name suggests, it is a type of group insurance plan where the group members pay the premium (partially or fully) to avail of the benefits of the insurance cover. For example, some employers might deduct a certain percentage of the insurance premium from an employee's salary.

Types of Group Insurance Plans available in India:

Below are the types of group insurance plans available in India.

1. Group Health Insurance/Mediclaim Cover

An employer purchases a Group Health Insurance Policy or Group Mediclaim Policy to provide health insurance coverage for the employees. It is one of the most common benefits offered by an employer to an employee. In some cases, the Group Health Insurance Plan covers the family members or dependents of the employee.

Features of a Group Health insurance Plan

Covers employee and his/her dependents or family members.
No pre-medical checkup required.
Cashless treatment at network hospitals.
Covers pre- and post-hospitalisation expenses for a certain period.
May also offer maternity benefits.
No waiting period.
Covers critical illnesses.
Some policies cover OPD and daycare expenses.

2. Group Personal Accident Insurance

The Group Personal Accident Insurance Plan works similarly to an individual Personal Accident Insurance. In this case, the employer or an association offers the coverage to the employees or members to provide them with financial protection against expenses related to accidental injury. The insurance plan covers accidental injuries which lead to hospitalisation, disability (partial or permanent) or even death.

Features of Group Personal Accident Insurance

Covers all accident-related injuries.
Provides a financial backup in case of loss of earnings.
Covers hospitalisation expenses, including bone fracture.
The insured will receive a certain percentage of the sum insured amount in case of total temporary disability.
The insured will receive 100% of the sum insured in the event of loss of vital limbs.
In case of partial disability, the insured will receive the 50% of the sum insured amount.
In case of accidental death, the nominee will receive the entire sum insured amount.

3. Group Pension/Superannuation Insurance

The Group Pension or Superannuation Plans are designed to cater to an employee's retirement needs, and an employer typically offers them. It is also an efficient alternative to popular retirement plans such as EPF (Employee Provident Fund) and NPS (National Pension System).

Features of Group Pension/Superannuation Insurance

Offers financial security after retirement.
Tax benefits under Section 80C (For individual contributions).
Employees can transfer the benefits at the time of leaving the organization.
Can build regular monthly retirement income with multiple annuity options.

4. Group Employee Deposit Linked Insurance (EDLI)

Group Employee Deposit Linked Insurance is part of the EPF (Employee Provident Fund) scheme. The benefits of this plan depend on the employee contribution towards the provident fund. EPFO (Employee Provident Fund Organization) currently offers benefits of up to Rs. 7 lakhs in case of permanent disability or death.

Features of Group Employee Deposit Linked Insurance

It is universally applicable, regardless of working hours or the place of accident.
An employee can transfer the benefits during the change of employment.

5. Workmen/Employee Compensation Insurance

Worker Compensation Insurance is an insurance cover offered by the employer to the workers under the Employee Compensation Act, and The Ministry of Labour governs it. The insurance plan covers statutory liabilities of an employer in case of injury/death of a worker caused due to an accident during employment.

Features of Workmen/Employee Compensation Insurance

Financial support in case of accidents during employment.
Covers loss of income due to injury/disability.
Provides financial security for workers who are even working on a contract or seasonal basis.

6. Group Travel Insurance

A Group Travel Insurance is a combination of health, accident and liability insurance. This plan covers a traveller group against the risk of loss of luggage, medical emergencies, accidents and third-party liabilities. A Group Travel Insurance Plan is not limited to a group of people travelling together. But employers can also purchase Group Travel Insurance for employees who travel several times in a year. The premium of this plan is calculated depending on the number of travel days in a year.

Features of Group Travel Insurance

Coverage against employees personal travel within the policy period.
Single-window management and hassle-free handling of employee’s travel emergencies.
No minimum number of employees required to purchase the policy.

7. Public Liability Insurance

Public Liability Insurance or Third-party Liability Insurance can be purchased by business entities dealing with employees, clients, the public or agents. The insurance plan covers third-party liabilities arising due to injury to the third party or property damage.

Example: A customer visiting your office slips due to the wet floor and breaks his/her ankle, leading to hospitalisation.

Public Liability Insurance covers such liabilities. This plan can protect your business from financial losses arising due to third-party liabilities.

Features of Public Liability Insurance

Covers liabilities arising from injury, accident or property damage on your business premises or arising from events related to your business.
Covers legal liabilities.
Covers contractual and tenant’s liability.

Disclaimer: The content on this page is generic and shared only for informational and explanatory purposes. It is based on industry experience and several secondary sources on the internet; and is subject to changes. Please go through the applicable policy wordings for updated ACKO-centric content and before making any insurance-related decisions.

Frequently Asked Questions

Below are some of the common questions related to group insurance plans in India.

Can husband and wife have separate group health insurance?

Yes, if the married couples work in different organisations, they can have separate group mediclaim policy offered by their respective companies.

Who is eligible for group insurance coverage?

An individual working in a company as a full-time employee or part of an association is eligible for group insurance coverage, provided the employer or the association offers a group insurance plan.

Can I customise the sum assured amount of my group health insurance policy?

The company-provided group health insurance plan comes with a base sum assured amount. You can enhance the coverage by purchasing top-up, but you have to pay the additional premium out of your pocket. Note that the employer controls the top-up facility.

Are group insurance plans better than individual plans?

Group insurance plans are affordable as the employer/association pays the premium. But the coverage may be limited, or you don’t have control over the additional benefits as the employer/association decides these factors.