Group Insurance Plans

• Group Insurance policy is a single master policy that covers all employees or members of your firm. A group may consist of employees or colleagues from a similar field of work such as lawyers, doctors, as well as members of cooperative banks or credit societies.

• A policy can be classified as:

  Contributory Scheme: Where both the employer and employees pay a premium towards a group insurance policy.

  Non-Contributory Scheme: Where the whole premium is paid by either the employer or nodal agency, which is a direct concerned office responsible for a consultation or execution of the government initiated projects.

• There are two types of group insurance products in the market. You can either choose from Term Insurance based policies or Fund-Management based schemes.

• Based on your annual gross income and dependents, you can choose from basic, supplemental or dependent coverage.
• Coverage offers assured sum depending on your gross annual income, whereas supplemental group insurance offers 1-3 times your basic coverage. Dependent coverage lets you choose a certain assured sum on your spouse and child based on your marital status.

Also Read: What is Sum Assured

An organization’s employees and members including partners, proprietors, and full-time employees can request insurance on either an immediate basis or after completing six months of service, whichever option your firm has selected. However, firms having less than 25 eligible employees need to provide evidence of insurability to get the benefits of group term insurance plan. Usually, the request for insurance coverage from individuals from your firm is accepted based on their answers to certain questions without further medical evidence.

Under a group life insurance policy, firms can select from scheduled coverage sum. However, the assured sum of coverage for employees is based on their annual income. For your firm’s coverage, you can choose the protection from 1-3 times annual salary based on the selected schedule of coverage. Coverage assured for your employees shouldn’t exceed your firm’s maximum scheduled amount. Proprietors and partners of your firm under a certain age can be covered in group policy irrespective of their earnings.

Also Read: How to Determine the Ideal Coverage Amount for Term Insurance

This is one of the major questions employees have regarding the group insurance policy. Well, if you’re terminating your employment, you can continue your coverage if you wish. For that, you need to convert to an individual life policy. However, you need to either convert or port your policy within a specific time after termination to continue with your life insurance policy.