A group insurance Policy offers certain class of individuals the benefit of standard Health Insurance Coverage at very competitive rates. Majority of the group insurance schemes available on the market pertain to the employer- employee group. However, the guidelines of group insurance are not just limited to an employer-employee group, but it can extend to a group where there are common interests. Such groups may include employee welfare associations, holders of credit card issued by a specific company, borrowers of a bank besides professional associations or societies may also be considered as a group.
The cost of covering an individual within a group through a group insurance cover can be about 30% less than individual health covers. The low cost does not mean the health care coverage is compromised; rather insurance companies offer the discount as they are more than happy to pass on the savings they make in marketing and administration expense.
When taking a group health cover an individual does not have to go through medical check ups to qualify for the policy. Since the insurance company gets a pool of people under the insurance cover any individual specific Risk
is hedged by diversity of the population covered under the insurance policy.
An individual health insurance policy has several waiting periods for specified reasons and diseases. But with a group insurance policy you can get a fuller coverage for your needs. Group insurance policies generally would have a Waiver on these waiting periods. To get a handle on how valuable the benefit is let us look at the various waiting periods that individuals have to accept when they buy a health insurance policy.
30- Days Waiting Period – In order to ensure that people are not buying a health insurance policy to get an immediately pending Hospitalization expense covered, insurance companies have a 30-day waiting period before a Claim can be filed. In case of group insurance policy, such a waiting period can be done away with.
Waiting period for Pre-existing disease – Likewise, individual health insurance policies have a 3 to 4 year waiting period before which they allow Reimbursement of health claim for expenses related to some pre-existing diseases. This however, may be waived off in a group insurance policy.
- 2 year waiting period – Apart from pre-existing diseases, insurance companies also disallow coverage of pre-specified illnesses or surgeries for a period of upto 2 years which as well can be waived off in a group insurance plan
Thus, by virtue of some very obvious benefits that group insurance policy offers they are getting increasingly popular. Employers and companies find these an effective tool to enhance employee and customer satisfaction and thus enhance their own business prospects in turn.