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Benefits and Drawbacks of a Group Insurance Cover

With mounting costs of medical treatments, a health insurance policy needs no second thought. In fact, health insurance plans have become a primary way to secure yourself against the soaring medical expenses. Not just hospitalisation expenses, a health insurance plan also covers other expenses like the pre and post treatment costs. But which health insurance policy is right for you? The answer to it depends on what are your coverage requirements. Among the various types of health insurance in India, a group insurance policy has become popular over the years.

Group Insurance Cover

A group policy extends the benefits of an individual h to a group of individuals associated with a common organisation. This can be a group of people having account with a bank or more commonly associated with the same employer. The benefits available under such group policy is equal for all. In addition, the policy benefits are even available on an optional basis for the family members of the subscribers to this policy. This article simplifies some of the benefits and limitations when you avail medical insurance with group coverage.

Benefits of group insurance plans

  • Waiting period and coverage for pre-existing diseases

Unlike individual covers or health insurance plans for family, a group insurance policy offers advantage in terms of the waiting period for pre-existing ailments. Usually, any pre-existing diseases require waiting periods that can be as high as two to four years. But with a group insurance plan, this coverage for such existing ailments is available for day one. Moreover, majority of the claims concerning such pre-existing diseases are accepted in a group policy. Hence, another advantage over your standard health plans where claims may be refused. * Standard T&C Apply

  • No requirement of medical check-up

Unlike standard health insurance policies, a group policy does not require medical check-up to seek coverage. While some other policies mandatorily require a medical check-up for extending insurance cover, a group policy does not. * Standard T&C Apply

  • Premium is an added benefit

Group plans are most times offered in a corporate setting and hence synonymously known as corporate insurance policies. The premiums for these corporate plans are generally paid by the employer which offers an added perquisite to salary compensation. Only the features that you opt on an optional basis are required to be paid by you.

Drawbacks of group policies

  • Limited coverage amount

Unlike other health plans, a group policy is available with a limited and pre-defined sum insured. Not always this amount may be sufficient to cover the entire treatment cost and thus may require out-of-pocket expenses. To avoid this, you must not depend solely on a group insurance plan.

  • Co-payment clause

Co-payment clause is a part of such group plan. This clause requires you, the policyholder, to bear a percentage of the claim while the balance is compensated by the insurance company. Again, it requires you to bear a specified percentage for the treatment cost. * Standard T&C Apply

  • Capping on expenditure

Group plans also lack in the coverage it offers for the treatment related expenses. These plans limit on how much compensation is provided for a specified expense, say room rent thereby limiting the coverage of the plan. * Standard T&C Apply

  • Valid till employment

The utmost downside of relying entirely on a group insurance plan is that it remains in force only till you are associated with the organisation. For employment, any change will result in no coverage going forward. Thus, must not be relied upon entirely.

These are some pros and cons of using the group insurance facility. When used in combination with other individual plans, family floater cover, critical illness insurance, and the like, it provides best results. Also keep in mind insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms and conditions, please read sales brochure/policy wording carefully before concluding a sale.

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