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Benefits and Drawbacks of a Group Insurance Cover

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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. Health insurance plans have become a primary way to secure yourself against soaring medical expenses. A health insurance plan also covers other expenses like the pre and post treatment costs, not just hospitalization expenses. 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 standard organization. This can be a group of people having an account with a bank or more commonly associated with the same employer. The benefits available under such group policy are equal for all. In addition, the policy benefits are even open on an optional basis for the family members of the subscribers to this policy. This article simplifies some of the benefits and limitations of 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 families, a group insurance policy offers an advantage in the waiting period for pre-existing ailments. Usually, any pre-existing diseases require waiting periods 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, most 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 a medical check-up to seek coverage. While some other policies mandatorily need 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 often offered in a corporate setting and hence synonymously known as corporate insurance policies. The employer pays the premiums for these corporate plans, which is a prerequisite for salary compensation. You must pay for only the features that you opt for on an optional basis.

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. You must not depend solely on a group insurance plan to avoid this.

  • Co-payment clause

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

  • Capping on expenditure

Group also plans lack in the coverage it offers for the treatment-related expenses. These plans limit how much compensation is provided for a specified payment, say room rent, thereby limiting the project’s scope. * 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 organization. For employment, any change will result in no coverage in the future. Thus, it 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 the 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 the sales brochure/policy wording carefully before concluding a sale.