Group Health Insurance

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Earlier, insurance was offered only by agents, and then came banks. Now, thanks to the advent of digitisation, a lot of online platforms have started offering insurance policies. Many e-commerce apps, app-based cab booking companies like Ola and Uber, digital wallet platforms like Phonepe, etc. have started selling health insurance plans. Many of the policies available on these platforms, however, are group policies.

How do group plans work? What are the benefits of opting for group plans? Are there any drawbacks? How should you approach insurance policies offered by these online platforms?

We answer these and a lot more questions - in this article.

So, let’s begin!


What Is A Group Health Insurance Policy?

Just like the name suggests, a group health insurance policy provides coverage to a group of members with a common purpose. Examples of groups include account holders of a bank, employees of an organisation, members of a club, registered users of a mobile app, etc.


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How Does Group Health Insurance Work?

A Group health insurance plan provides financial coverage only to those who are part of the said group. Here, the group administrator, such as an employer, organisation, or bank, acts as the point of contact between the insurance company and the members of the group. The IRDAI states that the group should have been formed for a common affinity rather than just buying insurance.

The insurer issues a single policy for the entire group, which is known as a master group policy. It is issued in the name of the group administrator. Each eligible group member then receives a certificate of insurance.

  • How can you enrol under group health insurance?

    You can do so via the following mediums - the website/app of your group administrator.

  • Are any medical tests required?

    No, you usually do not need to undergo any pre-policy medical tests to enrol under group health insurance. You can avail of coverage by giving your consent and a health declaration.

  • Do you need to pay anything for it?

    It depends.

  • If The Group Administrator Is A Corporate Body/Employer

    The premiums are generally paid by the group administrator. But, if the health insurance coverage also includes your family members or if you choose a higher cover amount than the specified limit, you may be required to pay.

  • If The Group Administrator Is A Bank, Travel Platform, Etc.

    You will be required to pay the premium, but you may get discounts or offers.


How Does Group Health Insurance Vary from Individual Health Insurance?

The table below shows the key points of differentiation between the two policies -

  Group Health Insurance Individual Health Insurance
Premiums Payable Relatively lower. Generally higher due to comprehensive coverage and extensive features.
Policy Administration The master policyholder makes the decisions. You will have very little or zero control. You have complete control regarding policy features. You can choose the ones that you need.
Pre-Policy Medical Tests Not mandatory. A declaration of good health will be sufficient.

Mandatory in most cases, like -

If you are above 45 years of age.

If the total sum insured crosses Rs. 25 lakhs.

If you have declared that you have a medical condition in the application.

Documentation The documentation required is very minimal. You need to fill out detailed application forms and submit documents.
Membership and Coverage As long as you are a member of the group, you are covered under the policy. You will be covered as long as you renew your policy on time.
Policy Issuance The policy issuance is carried out within 24-48 hours. You will receive an email containing the policy document. Policy issuance takes place after your application is evaluated and you undergo medical tests. This may take some time.
Pre-Existing Diseases Coverage In most cases, pre-existing diseases are covered from the first day of policy issuance. You have to serve waiting periods set out by the insurer to start getting coverage.
Policy Cancellation The master policyholder gets to decide on policy cancellation and withdrawal. You can choose to discontinue or cancel the policy.
Tax Benefits Only if you are paying the premiums, you are eligible for tax benefits under Section 80D of the Income Tax Act of 1961. You receive tax benefits under Section 80D of the Income Tax Act of 1961.


How Do You Know If A Policy Is A Group Policy Or Not?

Here’s how-

  • You can tell if the coverage being provided to you is a group cover or not by examining the terms and conditions of the policy. Look for the word ‘group’ in there. If you find it, the policy being offered to you is a group policy.

  • If you've already purchased a policy and want to know what type it is, check for the words 'Certificate of Insurance' on the policy document. These words will be mentioned on your policy document only if it’s a group policy. The policy document will also include a 'Master Policy Number,' which indicates the group’s policy number.


Which Platforms Offer Group Health Insurance Policies?

Group health insurance coverage is offered by-

  • Corporates

    Many corporates provide group health insurance covers to their employees. In some cases, the health cover is extended to the family members of the employees, too. The employees can keep the policy as long as they are working for the company.

  • Banks

    In addition to managing your savings account, banks also offer a wide range of financial products, including insurance policies. Banks provide group health insurance plans to their account holders, depositors, borrowers, etc.

  • Associations

    Today, insurance can also be facilitated by groups who engage in a common activity or share similar interests. These groups may include members from cultural, social, or welfare associations. In most cases, the group administrator or head of the association purchases the group insurance coverage to protect the members.

  • Other Platforms

    A lot of platforms, like online travel agents, app-based cab booking companies, e-commerce apps, etc. have started offering micro insurance policies. The insurance is offered while you're buying some other product.


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Benefits Of Group Health Insurance Plans

There are several benefits of group health insurance - especially if you’re taking it for you employees. Providing health coverage for employees ensures a safety net in case of medical emergencies. This sense of security can lead to a deeper commitment and a long-lasting employment relationship.

A Group Health Insurance Policy provides numerous benefits that can help promote a healthy and active lifestyle, like monitoring health and fitness, setting wellness goals, etc. This can help motivate group members to stay active and improve their overall health. It also enables members to seek medical advice and treatment promptly, reducing the risk of minor health issues developing into more serious conditions. Other benefits of group health insurance plans include -

Some benefits of group health insurance policies are -

Cheaper Than Individual Policies

The risk is shared by a large number of people under a group health insurance coverage. As a result, the premiums are lower compared to retail health insurance.

  • Exclusive, Special Discounts Available

    A group health insurance policy is purchased for a group of people. So, the group owner can negotiate a bulk deal and request extra perks and discounts from the insurer.

  • Less Documentation Required

    Compared to retail health insurance policies, very less paperwork is required while buying a group health insurance plan.

  • Gives Coverage To Family Members

    Group Health Insurance may provide financial protection for medical needs, not just to group members, but also to their loved ones. This can provide peace of mind, knowing that their family is protected in case of any medical crisis.

    The terms of the policy set out by the insurer will determine the extent of coverage for dependents. Some policies may allow employees to include their spouse, children, and parents in the coverage, while others may only cover immediate family members.

  • No Medical Checkups Needed

    Generally, insurance companies issue a group health insurance plan without any medical tests.

  • Fewer Restrictions

    Obtaining personal health insurance can be challenging at times owing to severe health conditions or age limits. In such circumstances, group health insurance may be a better alternative because they have fewer restrictions - and can cover people with a complicated medical history.

  • Gets Issued Instantly

    Most insurance companies issue the group health insurance cover immediately - in less than 24 hours.


Drawbacks Of Group Health Insurance Plans

Here are some things you should be mindful of when opting for a group health insurance scheme-

Coverage Is Linked To Your Membership

A group health plan is issued to you because you’re a part of a group. So, if you're no longer a member of the group, i.e., if your relationship with your group ends, so does the policy.

For instance, the group health insurance plan with your company will end as soon as you leave your job or retire.

The Scheme Can Be Cancelled At Anytime

If things don't work out for the insurer or the group, the insurance scheme might be withdrawn. If this happens, you’ll be left without a cover. In the case of health insurance, however, if the scheme is discontinued, it is the insurer's job to migrate you to a personal plan.

Limited-Time Contract

A group insurance coverage is often a one-year agreement. Based on the claims received in the previous year, the insurance company might evaluate and adjust the pricing and terms of the policy in the following year.

No Control Over Policy Terms And Conditions

Since a group insurance policy is purchased for the whole group, you will have no control over the policy terms, conditions, features, etc. The group owner would choose a policy that would fit their budget and so, they’ll be less bothered about buying a policy that would be suitable for your needs.

Poor Service Can Be An Issue

Normally, banks, corporates, and other group owners would have little or no knowledge of how insurance policies or claims work. Many a time, they'll leave all this entirely in the hands of the insurance company. This means you'll have to contact the insurance company every time you need help.

How To Approach Group Health Insurance Plans?

When it comes to buying health insurance from such platforms, you should not get swayed away by attractive propositions such as low pricing, quick issuance, and so on. These plans may include hidden terms and conditions that may prevent you from availing full benefits.

You will also have no say over the policy terms and customisations. Therefore, if you want a customised, sufficient health insurance cover for your family, skip group policies and buy a personal plan.

Group health insurance products should be bought only as a last resort - if you are unable to get health insurance elsewhere due to age or health reasons.

Frequently Asked Questions

1.Can you have both employee medical insurance and Individual Health Plans?

Yes. This ensures that you have sufficient coverage in case of medical needs and emergencies, especially if you have a health condition that requires recurring treatment. It’s also a wise decision to not rely solely on employee medical insurance as the policy control lies with the group administrator and it may get withdrawn or more expensive. Best to have your own individual/family floater plan as a backup.

2. Is corporate health insurance cheaper than individual health insurance policies?

Yes. Due to the large number of people enrolled in the plan, corporate health insurance plans are cheaper than individual health insurance plans.

3. What are the limitations of Group Health Insurance?

These policies may not provide members with enough coverage. Members have little or no control over the policy features, terms, and customisation. The T&Cs, prices, and benefits may be altered by the group administrator at any time. Further, the policy cannot be tailored to the member’s individual needs and requirements. And, the member will generally not receive tax benefits, except where they pay the premium.