The association wish to purchase a group type of insurance plan that covers a number of people in the same contract. Such a plan will provide the same level of insurance coverage to all members irrespective of their age, gender, occupation or socio-economic status.
The insurance policy will eliminates the need to buy a separate insurance plan for each member as well as cater for immediate Health or berevements that will have befallen any member or his/her dependants.
Such a plan provides cover to group members and their spouses, children and dependent parents.
Features of Group Insurance
- As risk spreads over a large number of people, a group insurance plan provides standardized coverage at competitive premium rates. This means that the coverage is the same for all members of a group.
- Irrespective of the size of the group, group insurance covers all members under the same plan. The plan may be in the form of group life insurance, group health insurance, group travel insurance or group personal accident insurance.
- A group comprise members of a social or cultural association.
- The manager of the group gets a master policy in the name of the group.
- Premium is charged to the members or can be paid by the group.
- A member is covered as long as he is a part of the group. The cover ceases if a member leaves the group.
Benefits of Group Insurance
Buying a group insurance plan can be rewarding for individual group members such as association members. Today, many companies and businesses prefer to cover their employees with group insurance as part of the overall compensation. Here are the key advantages of a group insurance plan for employers and employees.
- The premium paid in group insurance is lower than the premium in an individual policy for a member. These plans reduce the liability of the insurance provider as the risk is spread across all members of the group.
- As premiums are often paid by the association members, group insurance offers a convenient way to cover all members with different income brackets. These plans provide a cost-effective means for association to provide an insurance cover for its members.
- Group insurance helps enhance loyalty of theAsscociation for it’s member. A group member feels valued to be a part of the group and is likely to continue his association with the group for a long period. In addition, these plans help the association create a friendly environment.
- Often, a group insurance plan covers family members of group members. For example, many group health insurance plans cover spouses, dependent children and parents of the group member..
- Group insurance provides standardised coverage for all members. It helps people of lower income groups to get the same coverage as those with higher income groups.
- Some group insurance plans can be converted into individual plans when a member leaves a group. In such a case, the member has to pay a conversion fee.
- Group members are not required to fulfil pre-requisite conditions. On the other hand, individual insurance plans often require the policy applicant to undergo a health check-up
Eligibility criteria
Here are the eligibility requirements for a group insurance plan.
- The minimum number of group members can vary in different types of group insurance plans. Some plans may require a group strength of at least 10 members. Others may require 50 members in a group to be eligible for group insurance.
- The minimum age for entry is 18 years.
- The maximum age may vary. Some plans have a maximum age limit of 60 years while some allow entry till 80 years.
- All members must be active and full-time members of the group.
Conclusion: Group insurance offers a smart and convenient option to cover all members of a group under the same plan. Such a plan offers several benefits to individual members as well as the group as a whole.