In the current dynamic business world, employee benefits have ceased being a choice and are being used as a strategic tool in talent retention and stability of the organization. Group term insurance plan and group medical health insurance are two of the most important elements of a good benefits portfolio. Such financial protection systems cover the employees and their families and help increase the credibility of the employers.
In the case of organizations that want to develop trust and long-term loyalty, structured group insurance offers social as well as financial risk protection.
Knowledge on Group Term Insurance Plan
A group term insurance plan is a life insurance policy that is provided to employees by an employer under one master contract. This policy unlike the individual life insurance covers a group of individuals collectively, at a lower premium cost through risk pooling.
In this arrangement where a nominee is engaged, and an insured employee dies in the course of the policy, he/she gives a nominee a sure sum amount. The policy coverage is normally pegged on salary or job grade of the employee. The cost of the premiums may be paid in full by the employers or divided between employees as per the company policy.
The main benefit of group term insurance plans is cheap and easy underwriting. Most employees are enrolled without any thorough medical checkups in a majority of cases and this makes the process of enrollment smooth.
Pivotal Advantages of Group Term Insurance
According to employers, the group term insurance plan is a better way to add value to the compensation package of the organization without necessarily raising the cost of operation. It shows fiscal accountability to the family of employees and supports the security in the workplace.
To the employees, it is direct financial insurance at a small or no cost. The coverage of people who might not find it easy to have personal life insurance cover because of their health conditions can have one easily under a group cover.
Nevertheless, it should be remembered that under a group term insurance plan, an individual will be covered until the time employment is stopped, unless there are portability facilities.
Everything You Need to Learn About Group Medical Health Insurance
Life insurance provides security to the family in case of the financial loss caused by death, whereas group medical health insurance covers the medical costs of an employee while they are still alive. The increasing medical expenses in India have turned health cover into a need and not a luxury.
Group medical health insurance offers hospital care, no-cash treatment plans, and payment advantages to the employees and, in most instances, their dependents. The policy usually covers the room rent, surgeries, daycare procedures, as well as the pre- and post-hospitalization costs.
Organizations have negotiated group rates with insurance companies, and hence, the premiums charged are lower than those for individual health policies. Depending on the plan chosen, the coverage may also encompass maternity benefits, wellness programs, and preventive health checkups.
The Reason why businesses invest in Group health cover
The healthcare inflation is still on the increase every single year, making the financial load on people heavier. Employers also save their employees’ coverage against any unforeseen medical emergency that might leave them in distress due to the lack of medical health insurance offered by the employer.
Strategically, full health insurance saves time by making employees more satisfied, eliminating sick leaves, and increasing productivity. Employees will feel appreciated when their health and family life are given priority.
Moreover, the companies can be accorded tax incentives to pay premiums on employee insurance under the current tax laws.
The two policies combined have a whole financial safety net for employees
In modern insurance, organizations can tailor coverage to their level of workforce and risk profile of the industry, and budgetary allocation. Employers have an opportunity to add an accidental death cover or a critical illness cover to group term insurance.
On the same note, group medical health insurance cover can include maternity cover, mental health cover, outpatients cover, and wellness, among other types of add-ons. This kind of improvements matches the changes in healthcare benefits with employee benefits.
The issuance of group insurance is not only a benefit but also an obligation in some areas. Formal insurance cover makes the organization less liable in terms of money in the event of unexpected contingencies associated with employees.
In risk management perspective, group policies shift the financial risk between the employer and the employee to the insurer, whereby there is stability and predictability in terms of expense planning.
Conclusion
A sound employee benefits program is based on group term insurance plans and group medical health insurance. Whereas life insurance insures the family against loss of income in case a person dies before their time, health insurance insures against the cost of increased medical bills.
