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Group Insurance Policy for Small Business

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Group insurance policy – what does it mean?

Did you know that you get complimentary health coverage when you work at a company in India? The answer to this query is yes. It is correct. The organisation customarily purchases a group insurance policy at the behest of its employees. This comes as a part of working in a modern working office environment. In short, your organisation buys a health plan, and you reap the benefits of medical cover free of charge. 

Note: Post the nationwide Covid19 lockdown, The Insurance Regulatory and Development Authority (IRDAI) released a circular (April 16th 2020) on providing mandatory medical insurance coverage to workers. You can look into the circular here

Group insurance policy for employees – benefits

Group insurance plans come with numerous advantages for the employer and employees. Here is a list for you to read. 

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Cost saving – One of the primary deterrents of buying individual healthcare cover is cost. Plus, insurance premiums for single plans tend to increase every year. The expense can be pretty challenging for startups, small businesses, MSMEs and budding startups. A group medical health insurance plan is a first-class option for the employer-employee. An organisation can get good group insurance coverage at an affordable quote online. In return, this enables the employees to get free medical care for themselves and their families. 

Just think about it; when you start working, you need not worry about medical expenses. Long story short, get work today and get cover from day one. As an owner of a small business, a group mediclaim policy is a suitable course of action to keep your employees safe from medical emergencies. 

Tax deductions – Thoughts on saving money by reducing day-to-day operational expenses will occupy your mind when scaling a small business. Early stage tax optimisation of your organisation can bring many surplus benefits in the long run. One of the ways to go about this is with the help of a group insurance policy. Group plans are labelled as a business expense, and your institution can avail of tax benefits on the premium paid to the corporate medical insurance plan. 

Keeping the above two points in mind, here are two questions that are likely to come up. 

Can workers claim income tax benefits on employee insurance? 

In most companies and institutions across India, the corporate buy group insurance. But in many settings, employees might be required to pay a small portion to contribute to the premium. This sum will be eligible for an income tax deduction solely for the employee. The amount is generally deducted from your salary monthly, quarterly, or yearly (depending on what your company or insurance group options provide). 

Just how employee provident fund is directly deducted from your salary mentioned in the payslip. The amount of premium deducted will be showcased in your salary slip. 

How is a group insurance policy less expensive? 

Individual health plans work on the single sum insured criteria. On the other hand, group insurance plans work based on the size of the group (the number of employees to be included in a master policy). This principle also secures underwriting as the risk is mitigated over a pool of workers. More people get covered under a singly master plan. This option is considerably more affordable than buying individual plans for each employee by paying single premiums. 

What is the type of cover that you will get?

Employees are qualified for medical cover from day one of work. As an owner of a budding startup, this means a lot for you and your teams. You get:

  • A suitable quote for a group insurance policy.
  • Option to customise plans online.
  • Lower price for group insurance cover.
  • Better plans and cover for pre-existing diseases.
  • Current policies come with Covid-19 cover. 
  • Good doctor teleconsultations on mobile and web.
  • The choice to incorporate GTL and GPA with GMC
  • Regular wellness sessions for your employees. 
  • Select super top-up to increase the base sum insured.

The above list comprises a broad set of features. The benefits of a group insurance policy additionally depend on the type of policy set up by your organisation. 

Now let us help you recognise this jargon.

Type of policyWhat does it mean?Scope of coverFor who?
GPAGroup personal accident insurancePersonal accident and disability during employmentEmployer-employee
GMCGroup medical coverA corporate medical insurance planEmployer-employee
GTLGroup term life insuranceA term insurance plan for your workforceEmployer-employee

Now that you have understood what group term life insurance means and more, let us read further. 

Constructive working environment

It is noteworthy that happy employees give maximum effort to achieve their OKRs and contribute more towards company productivity. This aspect helps develop a productive workforce and retain good talent. When employees and their family members are safe from the cost of unforeseen medical emergencies, they are less stressed and highly motivated to work in their respective organisations. Here is a five-point outcome of having a comprehensive group insurance policy.

  • Employees will feel valued and appreciated, and their families will be untroubled. 
  • You will be able to retain, attract and engage with the best talent across the industry. 
  • A good work environment will help create long-term employee relationships and careers.
  • Employees will care about the company and their jobs. 
  • You will be able to build a culture of employee benefits and wellness.

Small businesses have the potential to scale up very fast. When your organisation grows, so will your employees. You must provide medical insurance for employees even after than pandemic is over. It will also show that you care for the employee’s family members. 

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Hi everyone! I'm a growth marketer at Plum Insurance. I specialise in crafting functional and structural articles for search engine optimisation. I joined the insurtech space in 2018 and have been writing ever since. Also, I'm fluent in intermediate Python 🐍 as well.