Benefits Of Group Insurance And Eligibility Criteria For The Same

A group insurance offers insurance protection to all group members, irrespective of their age, social status, or economic background. This relieves the group from having to buy a separate policy for each member. The ideal example of such insurance is the protection employers provide to their employees. This, they offer, as part of their payout benefit to their staff. And such a policy typically covers all the employees and their dependents.

Group insurance is offered to the following types of groups:

  • Employer-employee Group: A formal group which consists of employees working for the same boss, the group owner. Organizations and businesses fall in this category.
  • Cultural Organizations or Societies: These are also called informal groups. All members of this group will be using a single credit card, and the group’s owner will buy insurance coverage for the group.

Given below are some of the benefits a group insurance plan offers the policyholder:

  • Affordability

Group insurance policies, in general, are affordable. Thus they help small firms to ensure safe healthcare for their employees. It also allows employees who find insurance policies too expensive to have for their families. The business owner has to ensure that the plan is designed to give maximum value for the money.

  • Ability to manage funds professionally

In the case of Group annuities and Group gratuities, the funds may fluctuate due to numerous external factors. If these rates are too high, it may drain an employer’s funds. The availability of professional fund management helps businesses balance the outflow of money. It also helps the employer find ways to maximize returns for employees.

  • Ease of payment

Timely premium payment is a must for an insurance policy to go smoothly, and group insurance makes it a breeze. If it is a formal group, the premium amount is automatically deducted from the employee’s salary. This ensures that the policy remains intact until the employee decides to quit the firm. The moment an employee does it, his group insurance plan stops at that moment.

Group insurance entitles the employers to the following benefits:


  • It ups the productivity of your staff


A group insurance plan helps make your employees feel part of the time. They start to believe that you care for them. Financial security relieves them of the stress of being concerned about unexpected emergencies, and they work relaxed and happy. This positively impacts their productivity, and the company benefits in the long run.

  • A group insurance policy is cost-effective.

The low premium of group insurance plans helps you care for your employees without draining your wallet. It also assists in creating a good reputation among your staff. This leads to better talent retention.

  • Premium payment is convenient.

Employers may decide to pay the premium of employee insurance policies at their convenience and per the company’s policies. This makes it easier on the budget, both for the employer and the employee.

  • You acquire greater talents.

A higher salary is just one aspect that attracts excellent skills to a firm. High performance requires a lot more than that. They want the company to have a good reputation in the market. The incentives offered, the firm’s location and other benefits play a vital role in drawing talents to your business. A group insurance policy has the final say in this regard.

Eligibility Requirements

The insurance company you choose decides your eligibility for a group insurance plan. Each one may have its requirements. The law of your State, too, will influence the firm’s decision. It is offered to certain groups like trade unions, creditor or debtor groups, fraternities, alumni etc. It may even impose restrictions on the number of members the group can have. This is done to minimize negative selections and reduce spending. Most of the time, this is fixed; the larger the group is, the lower the premium for each member will be.

If you decide to buy a group plan for your employees, they should meet the following conditions:

  • They should be full-time workers.
  • Their insurance policy will begin only after their probationary period.
  • They should apply for the policy only after they become eligible for it.
  • When the insurance policy starts kicking in, they should be working for the firm.

These may vary on the basis of employer type and the type of work they are doing.

Types of group insurance plans

Businesses can have the type of group insurance plan they need, depending on the requirements of their employees. If you are a small business owner, you can explore the following standard options:

  • Group term life insurance
  • Group personal insurance policy
  • Group health insurance
  • Group superannuation policy
  • Workers’ compensation plan

Whether you should opt for group insurance for your employees is no question. The only question is; how to get the best coverage available. Do your research, choose a reputed company and pay for the protection of your staff. They will reward you with better performance and greater profits in the long run.

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