Affordable Insurance Policies for Small Groups

Group policies may be attractive to consumers because the average price per policy is often lower. Carriers are interested in gaining customers and will cut prices a bit to take account of their lower costs.

Members who take up the insurance are generally eligible to renew coverage while they continue to be members of the group, subject to certain conditions.

group of doctors

Insurance Details

Again, using U.S. health coverage as an example, under group insurance, a person will normally remain covered as long as he or she continues to work for a certain employer and pays the required insurance premiums, whereas, under individual coverage, the insurance company often has the right not to renew an individual health insurance policy, for instance, if the person’s risk profile changes (though some states limit the insurance company’s rights not to renew after the person has been under individual coverage with a given company for a certain number of years).

In Canada, group insurance is usually purchased through larger brokerage firms because brokers receive better rates than individual companies or unions. There may be slight differences in terms of administration and market-related practices worldwide, even though the concept may be the same.

For example, in India, broker-procured group term insurance, unlike in Canada, does not intrinsically have any price advantage to the buyer, i.e., the Master Policyholder.

Group Life Insurance

Group Life Insurance covers may be either compulsory – in which case no member can opt out of the insurance – or voluntary, where each eligible member may decide within a given time limit whether or not to be included in the Group Insurance. This is irrespective of who pays the premium.

Since compulsory cover offers much less scope for adverse selection, it is subject to much more relaxed underwriting requirements than voluntary covers. Underwriting requirements, even for voluntary group life cover, are far less onerous than for similar insurance on individual lives. However, the assessment criteria for group life insurance coverage is stricter in comparison to individual coverage.

It is easier to qualify for benefits under individual cover than group cover at the claim stage. This is because group benefit covers a wider range of people without medical examinations, and group cover offers less scope for adverse selection, which is why it is cheaper.

Group Health Insurance

Group Health Insurance is also provided in India. It provides healthcare coverage to a group of people belonging to a common community (typically as employees of a company). These plans are generally uniform in nature, offering the same benefits to all employees or members of the group.

However, it can be customized to offer benefits by designation and profile of employees. Most professionally run companies today provide Group Health Insurance as a part of their Employee Welfare program.

Each company, however, gets the plan customized based on employee demographics. Typically, in India, companies use broker services to design their plan and negotiate with insurance companies.