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Frequently asked questions

Group Health Insurance FAQ

Fundamentals

What is group health insurance?

Group health insurance is a single policy that covers a defined group, usually a company's employees and their dependants. The employer purchases it from an IRDAI-licensed insurer and pays the premium. Every eligible member receives cover without individual medical underwriting. The policy pays for hospitalisation, day-care procedures, and pre- and post-hospitalisation expenses.

How does group health insurance work?

The employer selects an insurer, defines the sum insured and coverage terms, and pays a single premium for all eligible employees. Employees and their listed dependants access cashless treatment at network hospitals or file reimbursement claims. Plum's median pre-authorisation TAT is 45 minutes for cashless claims routed through partner insurers.

How does group health insurance work in India?

In India, group health insurance is regulated by the IRDAI. An employer buys a master policy covering all employees, with claims handled through a Third Party Administrator (TPA) or the insurer directly. Cashless treatment happens at insurer network hospitals; reimbursement covers the rest. Plum's median pre-authorisation TAT sits at 45 minutes.

What is the difference between group health insurance and individual health insurance?

Group health insurance covers many people under one master policy purchased by an employer. It skips individual medical underwriting and usually waives waiting periods for pre-existing conditions. Individual health insurance is bought by one person or family, uses medical underwriting, applies a 30-day initial waiting period, and covers pre-existing conditions only after 2 to 4 years.

Who is eligible for group health insurance?

Any registered Indian entity with a minimum group size can buy group health insurance. IRDAI defines a group as 7 or more members, which is also Plum's threshold. Eligible members include full-time employees on the payroll and, depending on plan design, their spouse, children, and parents or parents-in-law. Contract staff and interns can be added as a separate schedule at additional premium.

What are the benefits of providing health insurance to employees?

Providing health insurance protects employees from out-of-pocket medical costs, improves retention, and qualifies the premium as a deductible business expense under Section 37(1) of the Income Tax Act. It signals baseline benefit maturity to candidates. Group cover typically waives pre-existing disease waiting periods, so employees get immediate access to treatment for existing conditions.

Terminology

What is the difference between group medical insurance and group mediclaim?

There is no functional difference. Both terms refer to the same product, a hospitalisation-focused policy an employer buys to cover employees. 'Mediclaim' is the older Indian term, originally coined by New India Assurance for its 1986 policy. 'Group medical insurance' is the newer generic name. Features, exclusions, and IRDAI regulation are identical.

Is group health insurance the same as group medical cover?

Yes. 'Group health insurance' and 'group medical cover' refer to the same product, an employer-sponsored policy that pays for employees' hospitalisation and related medical expenses. Insurers and brokers use both terms interchangeably. What matters is the policy wording, sum insured, network, and inclusions rather than the label.

What is the difference between a group health insurance plan and a group health insurance scheme?

Both terms refer to the same arrangement. 'Plan' is common in insurer marketing; 'scheme' appears in older policy documents and government contexts like ESIC. Neither has a distinct regulatory meaning under IRDAI. When comparing options, focus on the master policy wording, sum insured, sub-limits, and network hospital list.

What is corporate health insurance?

Corporate health insurance is group health insurance purchased by a company for its employees and, optionally, their dependants. The employer holds the master policy and pays the premium. Coverage typically includes hospitalisation, day-care procedures, pre- and post-hospitalisation, and maternity. Plum requires a minimum group size of 7 employees to issue a corporate policy.

How is corporate health insurance different from group health insurance?

Corporate health insurance is a type of group health insurance, specifically the version sold to registered companies for employees. Group health insurance is the broader IRDAI category that also covers non-employer groups, such as bank customers, credit-card holders, or association members. For employers, the two terms mean the same thing in practice.

Coverage and benefits

What does a group health insurance policy typically cover?

A typical policy covers in-patient hospitalisation, pre-hospitalisation expenses for 30 days, post-hospitalisation for 60 days, day-care procedures, ambulance charges, ICU costs, and specified modern treatments. Most employer policies also include maternity cover, newborn cover, and pre-existing disease cover from day one. Optional add-ons include OPD, dental, and vision.

What is included in a typical group health insurance plan?

Standard inclusions are room rent, doctor and surgeon fees, nursing charges, ICU, diagnostics linked to hospitalisation, prescribed medicines during admission, and day-care procedures. Employer plans usually add maternity, newborn cover, and pre-existing disease cover from day one. Ambulance charges, mental health treatment as per the Mental Healthcare Act 2017, and modern treatments are also covered.

Are pre-existing diseases covered under group health insurance?

Yes. Most employer group health insurance policies cover pre-existing diseases from day one, with no waiting period, because the risk is spread across the group and individual medical underwriting is skipped. This is a key advantage over individual health insurance, which imposes a 2 to 4 year waiting period on pre-existing conditions.

What is the waiting period for group health insurance?

Employer group policies typically waive the standard 30-day initial waiting period, the 2 to 4 year pre-existing disease waiting period, and specific disease waiting periods (usually 2 years for conditions like cataract or hernia). Maternity is covered from day one in most corporate policies. Actual waiting periods vary by insurer and policy wording, so check the schedule of benefits.

What is the typical sum insured in a group mediclaim policy?

The typical sum insured in India ranges from ₹2 lakh to ₹10 lakh per employee. Mid-sized companies often sit at ₹3 to 5 lakh; large enterprises at ₹5 to 10 lakh or higher. Some policies use a floater basis where the sum insured is shared across the employee and dependants; others use per-member limits.

What riders can be added to a group health insurance policy?

Common riders include maternity cover (if not built in), OPD cover, dental and vision, critical illness, personal accident, top-up sum insured, corporate buffer, and specific disease cover. Riders extend the base policy at additional premium. Not every insurer offers every rider, so options depend on the base insurer's product menu.

What is the room rent limit in group health insurance?

Room rent limits vary by policy. Many corporate plans cap room rent at 1% or 2% of the sum insured per day for standard rooms, and 2% for ICU. Some newer plans offer 'no room rent capping' or a 'single private AC room' category. Exceeding the limit triggers proportionate deduction on other hospital charges.

Does group health insurance cover maternity?

Yes, most employer group health policies cover normal and caesarean delivery, usually with a sub-limit of ₹50,000 to ₹1,00,000, though some corporate plans offer higher limits or no cap. Employer group policies typically waive the 9-month to 4-year maternity waiting period that applies to individual policies. Newborn cover from day one is standard.

Does group health insurance cover dental and vision?

Standard group health insurance does not cover routine dental or vision, since these are outpatient expenses. Dental treatment is covered only when it follows an accident or requires hospitalisation. Employers can add dental and vision through an OPD rider or a separate outpatient benefit, which is common in flexible benefits or MNC-style plans.

What are the exclusions in a group mediclaim policy?

Standard exclusions include cosmetic surgery, dental and vision (unless from an accident), fertility treatment (unless the plan adds it), self-inflicted injury, injuries from war or nuclear risks, and treatment for substance abuse. Non-medical items like admission kits and administrative charges are excluded per IRDAI's standardised list of 199 non-payable items.

Family and eligibility mechanics

Can family members be covered under a group insurance policy?

Yes. Employer group policies typically allow the employee to add spouse, dependent children (usually up to age 25), and dependent parents or parents-in-law. Some employers pay the full premium for dependants, others share it, and some allow employees to add parents on a voluntary contribution basis. Adding family raises the group premium.

Can employees add their family to the employer's group insurance?

Yes, if the master policy allows dependant cover. The employer defines who counts as a dependant, usually spouse, children, and parents or parents-in-law. Additions happen at policy inception, at renewal, or on qualifying life events such as marriage or childbirth. Voluntary parental cover is often self-funded by the employee at a subsidised group rate.

Are domestic helps and contract workers covered under group health insurance in India?

Not by default. Group health insurance covers only the employees listed on the master policy, which usually means people on the company payroll. Contract workers, consultants, and interns can be added as a separate schedule if the employer chooses to and pays the additional premium. Domestic helps are not covered under an employer's group policy.

What happens to employee health insurance when an employee leaves?

Group cover ends on the employee's last working day, unless the employer extends it as part of the exit terms. The employee can convert the group policy to an individual retail policy from the same insurer within 30 to 45 days under IRDAI portability rules, subject to insurer approval. Waiting periods served under the group policy are usually credited.

Buying and procurement

How do I choose a group health insurance plan?

Start with headcount, budget per employee, and desired sum insured. Compare insurers on claim settlement ratio, cashless network breadth, pre-authorisation TAT, and sub-limits (room rent, maternity, ambulance). Then check policy wording for pre-existing disease cover, day-one maternity, and portability. Working with a broker like Plum simplifies comparison and negotiation.

What are the different types of group health insurance policies?

Common types are employer-employee policies (the standard corporate plan), group personal accident, group term life, and non-employer group policies (bank-customer, association, credit-card). Within employer-employee, sub-types include base group mediclaim, top-up or super top-up plans, voluntary parental cover, and OPD-inclusive plans. IRDAI regulates all of these under the group insurance category.

How can I buy group health insurance online?

Contact a licensed digital broker such as Plum or an insurer's corporate desk, submit employee count, age band, and desired sum insured, and receive quotes. Compare terms, sign the proposal digitally, and pay the premium online. Policy issuance and employee onboarding happen through the broker's platform. Plum issues policies for groups of 7 or more.

How are group health insurance quotes calculated?

Insurers price group premiums using headcount, age distribution, sum insured, dependant structure (self, family floater), sector risk, city tier, and prior claims experience. Plans with maternity, day-one pre-existing disease cover, and higher room rent limits carry higher premiums. Broker negotiation and multi-insurer bidding can bring the final rate down.

What information do I need to get a group insurance quote?

Insurers need employee count, age distribution by band, dependant structure (self, spouse, children, parents), city of employees, sum insured requirement, and any specific coverage needs like maternity or day-one pre-existing disease cover. Prior claims data is required at renewal. Company registration details are collected at proposal stage.

Who are the top group health insurance providers in India?

Leading corporate health insurers in India include ICICI Lombard, HDFC ERGO, Bajaj Allianz, Star Health, Niva Bupa, Aditya Birla Health Insurance, and Care Health. Public sector options include New India Assurance and National Insurance. Ranking varies by claim settlement ratio, network size, and product design. Plum places policies across all major insurers.

How long does it take to buy group health insurance?

End-to-end, buying group health insurance takes 3 to 10 working days. Quote turnaround is 24 to 48 hours once employee data is submitted. Proposal signing, premium payment, and policy issuance take another 3 to 5 working days. Plum onboards new companies faster when data is provided in the standard employee schedule format.

What is the minimum number of employees required to buy group insurance?

IRDAI defines a group as 7 or more members for group health insurance. Some insurers accept 5, and a few offer micro-group plans starting at 3. Plum's minimum is 7 employees. Smaller teams can consider group personal accident, individual retail health insurance, or wait until the headcount reaches the group threshold.

Can I buy group health insurance for a 5-employee company?

A 5-employee company falls below the standard IRDAI group threshold of 7. A few insurers offer micro-group products for 3 to 6 lives, but options are limited and pricing is less competitive. Plum's minimum is 7 employees. Smaller teams typically use individual retail health insurance until they cross the group threshold.

How do I compare group health insurance providers?

Compare insurers on incurred claim ratio (published by IRDAI annually), claim settlement ratio, network hospital count in your operating cities, pre-authorisation TAT, sub-limits, and policy wording exclusions. Also check TPA versus in-house claims handling, and the insurer's grievance record. Plum's median pre-authorisation TAT is 45 minutes across partner insurers.

What documents are required to purchase group health insurance?

Documents include the company's incorporation certificate, GST registration, PAN, address proof, and a signed proposal form. For the employee schedule, insurers need name, date of birth, gender, relationship (self, spouse, child, parent), and sum insured category. Bank details are needed for premium payment. Existing policy documents are required at renewal.

Is online purchase of group insurance reliable?

Yes, when purchased through an IRDAI-licensed corporate broker or insurer. IRDAI's Insurance Broker Regulations 2018 mandate the same due-diligence standards for online and offline placement. Policy issuance, claims handling, and grievance rights are identical. Plum is an IRDAI-licensed broker and issues policies through partner insurers with full digital documentation.

How do I procure a corporate health insurance policy in India?

Define headcount, sum insured, and coverage requirements. Approach 2 to 3 IRDAI-licensed brokers or insurer corporate desks for quotes. Compare proposals on premium, network, claim settlement ratio, and policy wording. Sign the proposal, pay premium, and receive the master policy. Employee onboarding follows via the broker or insurer's HR portal.

Should I work with a broker or buy corporate insurance directly from the insurer?

A broker represents you, not the insurer, and can compare quotes across multiple insurers, negotiate terms, and support claims. Direct purchase from an insurer limits comparison to that insurer's products. Broker services are typically free to the employer, since IRDAI regulates commission structures. For most companies, a broker adds value.

Compliance and regulation

Is health insurance mandatory for employees in India?

Health insurance is mandatory in two situations. Workers earning up to ₹21,000 per month must be covered under ESIC. The April 2020 MHA order requiring group health cover during COVID lockdown resumption was revoked on 23 March 2022. For employees above the ESIC threshold, group health insurance is not legally required but is standard practice.

Is it compulsory for companies to provide health insurance in India?

Not universally. Companies employing workers earning up to ₹21,000 per month must enrol them under ESIC. The Code on Social Security 2020, effective 21 November 2025, retains ESIC as the statutory scheme. For higher-earning employees, health insurance is not compulsory, but market expectation across the organised sector treats it as a baseline.

What is the post-COVID rule on employee health insurance in India?

The Ministry of Home Affairs order dated 15 April 2020 (Order No. 40-3/2020-DM-I(A)) required employers resuming workplace operations to provide medical insurance to workers. That order was withdrawn on 23 March 2022 when the NDMA revoked Disaster Management Act provisions. The parallel IRDAI circular of 16 April 2020 remains in force.

What is IRDAI's role in regulating group health insurance in India?

The Insurance Regulatory and Development Authority of India (IRDAI) licenses insurers and brokers, approves product wordings, sets minimum sum insured and coverage standards, publishes annual claim settlement data, and handles grievance escalations. Group health insurance falls under IRDAI's Group Insurance Guidelines and product filing regulations. All employer policies are IRDAI-approved.

ESI and ESIC comparison

What is the difference between ESI and group health insurance?

ESI (Employees' State Insurance) is a statutory contributory scheme run by ESIC under the Code on Social Security 2020, covering workers earning up to ₹21,000 per month. It provides medical, disability, and maternity benefits at ESIC-empanelled facilities. Group health insurance is a voluntary employer-bought policy with a private insurer, wider network, and higher sum insured.

Can a company offer both ESI and group health insurance?

Yes. ESI is statutory for eligible employees (earning up to ₹21,000 per month) and cannot be replaced. Group health insurance can be offered on top, either to the same employees for wider access or to those above the ESI wage threshold. Many Indian companies with mixed-salary workforces run both in parallel.

How does group health insurance compare to ESIC in India?

ESIC provides statutory cover to workers earning up to ₹21,000 per month through government-empanelled hospitals, funded by 3.25% employer and 0.75% employee contribution. Group health insurance is voluntary, offers a private-hospital network, higher sum insured, cashless treatment, and faster claim processing. Plum's median pre-authorisation TAT is 45 minutes.

Cost and premium

How much does employee health insurance cost per employee in India?

Group health insurance costs around ₹5,000 to ₹15,000 per employee per year for a ₹5 lakh sum insured, depending on age profile, dependant coverage, and add-ons like maternity or OPD. Younger workforces and self-only cover fall at the lower end. Family floater plans with parents cost more.

What is the average cost of group health insurance per employee in India?

The average premium is ₹7,000 to ₹12,000 per employee per year for a ₹5 lakh floater covering employee, spouse, and up to 2 children. Adding parents raises the premium to ₹15,000 to ₹25,000 per employee. Rates vary by insurer, group age profile, location, and prior claims experience.

How is the premium calculated for a corporate health insurance plan?

Insurers calculate premium using group size, age band distribution, dependant structure, sum insured, city tier, industry risk, coverage add-ons (maternity, OPD, day-one pre-existing disease cover), and prior claims experience at renewal. First-year quotes are underwritten on group demographics; subsequent renewals factor in the loss ratio.

How much does group insurance cost for a 10-person startup?

A 10-employee startup with self-only cover at ₹3 lakh sum insured typically pays ₹50,000 to ₹1,20,000 per year in total premium. Adding spouse and children raises it to ₹1,50,000 to ₹3,00,000. Age profile and city drive most of the variation. Plum's minimum group size is 7 employees.

Is group health insurance affordable for small businesses?

Yes. For a 10-person company with self-only cover at ₹3 lakh sum insured, premiums start around ₹5,000 to ₹8,000 per employee per year, which is roughly ₹400 to ₹700 per month. Group rates are lower than equivalent individual retail policies. Plum offers group cover starting at 7 employees.

Who pays the premium in employer-provided health insurance?

The employer pays the premium for the employee's base cover. Dependant premium may be fully employer-paid, employee-paid, or shared, depending on the company's benefit design. Voluntary parental cover is usually employee-funded at the subsidised group rate. Under IRDAI rules, only the master policyholder (the employer) is billed by the insurer.

Tax treatment

Is employee health insurance taxable as a perquisite in India?

No. Under Section 17(2) of the Income Tax Act, group medical insurance premium paid by an employer for its employees is specifically excluded from the definition of a taxable perquisite. Employees do not pay income tax on the benefit. The exclusion applies to hospitalisation cover, not to standalone reimbursement of medical expenses.

Is GST applicable on group health insurance premiums in India?

Yes. Group health insurance premiums attract 18% GST as of 2026. This is unchanged despite the September 2025 exemption on individual and family floater health insurance, which the 56th GST Council reduced to 0% effective 22 September 2025. Employers can claim Input Tax Credit on group premiums where legally mandated coverage applies.

Can an employer claim tax deduction on group health insurance premiums in India?

Yes. Group health insurance premium is a deductible business expense under Section 37(1) of the Income Tax Act, since it is incurred wholly and exclusively for business purposes. It is not claimed under Section 80D, which applies only to individuals. The deduction reduces the company's taxable profit for that financial year.

Can employees claim Section 80D deduction on employer-paid health insurance?

No. Section 80D of the Income Tax Act allows deduction only for premium paid by the individual taxpayer from taxable income. If the employer pays the premium, the employee has made no payment and cannot claim 80D. Employees can claim 80D only on premium they personally pay, such as for parents or a top-up policy.

Corporate health insurance specifics

What should a CFO consider when buying corporate health insurance?

Key factors are premium cost per employee, sum insured adequacy for the workforce, claim settlement ratio, cashless network reach in operating cities, pre-authorisation TAT, and policy wording (sub-limits, exclusions, day-one pre-existing disease cover). Also consider Input Tax Credit eligibility, renewal risk if the loss ratio spikes, and broker service quality.

What is a typical corporate mediclaim policy structure?

A typical structure includes a floater sum insured of ₹3 to 5 lakh per family, cover for employee plus spouse and up to 2 children, optional parental cover, day-one pre-existing disease and maternity, and a defined room rent limit. Cashless treatment runs through insurer-empanelled hospitals; reimbursement covers the rest.

What is a claim settlement ratio and why does it matter when buying corporate insurance?

Claim settlement ratio is the percentage of claims an insurer settles out of the total claims received in a financial year. IRDAI publishes it annually. A higher ratio, typically above 90%, indicates reliable payout behaviour. For corporate insurance, it signals how likely employees are to receive claim reimbursement without dispute.

Can a corporate insurance policy be customized?

Yes. Employers can customise sum insured tiers, dependant coverage, sub-limits (room rent, maternity, ambulance), waiting period waivers, and add-ons (OPD, dental, wellness). Custom flexibility depends on the insurer's product menu and group size. Larger groups get more customisation. IRDAI approves the final product wording before policy issuance.

What is the renewal process for corporate health insurance?

Renewal starts 60 to 90 days before policy expiry. The employer shares updated employee data and prior year claims experience with the broker. The insurer quotes revised premium based on the loss ratio (claims paid divided by premium collected). Employers can negotiate, add or drop coverage, or switch insurers with portability of served waiting periods.

Best and top recommendations

What is the best group health insurance policy in India in 2026?

There is no single 'best' policy. The right choice depends on headcount, age profile, sum insured requirement, dependant coverage, and location. Insurers with strong 2026 offerings include ICICI Lombard, HDFC ERGO, Bajaj Allianz, Star Health, and Niva Bupa. A licensed broker like Plum compares all of these against your specific requirements.

What are the top 5 group health insurance plans for Indian companies?

Frequently placed 2026 options include ICICI Lombard's Group Health Shield, HDFC ERGO's Group Medisurance, Bajaj Allianz's Group Health Guard, Star Health's Group Health Insurance, and Niva Bupa's Group Health Plus. Rankings shift based on group size, sector, and location. Compare on claim settlement ratio, network, and sub-limits before selecting.

Which insurer has the best claim settlement ratio for group insurance in India?

IRDAI publishes claim settlement ratio in its annual report. In recent years, HDFC ERGO, ICICI Lombard, Bajaj Allianz, Aditya Birla Health Insurance, and Niva Bupa have each reported ratios above 95% for health insurance. Group insurance ratios are typically higher than retail because employer claims involve less individual underwriting dispute.

What is the best corporate health insurance for a 50-person company?

For 50 employees, most major insurers compete on price and terms. Best-fit selection depends on age profile, dependant coverage, and sub-limit preferences. Companies of this size often get better rates by working with a broker who can negotiate across ICICI Lombard, HDFC ERGO, Bajaj Allianz, Star Health, and Niva Bupa.

What is the best employee health insurance plan for a startup?

For a startup with 7 to 50 employees, look for a plan with day-one pre-existing disease cover, day-one maternity, no room rent capping, and a strong cashless network in your city. Plum's minimum group size is 7 employees, and its median pre-authorisation TAT is 45 minutes. Match sum insured to team salary bands.

How do I evaluate which group insurance is best for my business?

Score options on premium per employee, sum insured, claim settlement ratio, network hospital coverage in your operating cities, sub-limits (room rent, maternity, ambulance), day-one pre-existing disease cover, and grievance record. Weight the criteria by workforce demographics. Ask the broker for peer-benchmark data. Plum's claims NPS is 79, which measures employee satisfaction with the claim experience.

Startup and small business

What is the best group health insurance for startups in India?

The best plan for a startup covers pre-existing diseases from day one, includes maternity from day one, offers a cashless network in your operating city, and starts at a manageable sum insured of ₹3 to 5 lakh. Plum specialises in startup group health cover with a minimum group size of 7 employees.

What is the minimum team size to buy group health insurance for a startup?

The minimum team size is typically 7 employees, in line with IRDAI's group definition. Some insurers accept 5, and a few offer micro-group plans from 3 lives at higher rates. Plum's threshold is 7 employees. Startups below this can start with individual retail policies until they scale.

Can a 2-person company get group health insurance in India?

Not typically. A 2-person company falls below the IRDAI group threshold of 7 members. A few insurers offer micro-group plans starting at 3 lives, but 2-person groups are rarely accepted. Founders and their first hire usually use individual retail health insurance until the team reaches the minimum group size.

What is the best group health insurance for small businesses in India?

For small businesses of 7 to 50 employees, the best plan has day-one pre-existing disease cover, a ₹3 to 5 lakh sum insured, a broad cashless network, and no burdensome sub-limits. Working with a broker like Plum, whose minimum group size is 7 employees, gives access to competitive rates across major insurers.

What insurance does a startup founder need beyond group health?

Beyond group health insurance, founders typically need group term life insurance (financial protection for employees' families), group personal accident cover (disability and accidental death), and Directors and Officers (D&O) liability insurance for the founding team. Depending on the business, cyber liability, professional indemnity, and commercial property insurance may also apply.

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Group Term Life Insurance FAQ

Answers to the most common questions Indian employers, HR teams, and founders ask about group term life insurance. Covers fundamentals, coverage, sum assured, claims, cost, tax treatment, and how group term life compares with EDLI, group health, and individual term insurance.

Fundamentals

What is group term life insurance?

Group term life insurance is a single life insurance policy an employer buys to cover all eligible employees for a defined term, usually one year and renewable. On the death of an insured employee during the term, the insurer pays a lump-sum death benefit to the employee's nominee. The premium is paid by the employer to an IRDAI-licensed life insurer.

What is GTL insurance?

GTL stands for group term life insurance. It is a pure-protection life insurance policy that covers a group of employees under one master contract held by the employer. GTL pays a lump-sum death benefit to the employee's nominee if the employee dies while employed. It has no maturity value, no savings component, and no cash surrender value.

How does group term life insurance work?

The employer buys a one-year renewable policy from a life insurer for a defined sum assured per employee. Premium is paid annually by the employer. If an insured employee dies during the term, the nominee receives the sum assured as a lump sum. Cover ends when the employee leaves, the policy is not renewed, or the term expires.

What is the difference between group term life insurance and individual term insurance?

Group term life insurance is bought by an employer for all eligible employees under one master policy, with premium paid by the employer and no individual medical underwriting up to the free cover limit. Individual term insurance is bought directly by a person, uses full medical underwriting, has a longer 10 to 40 year term, and continues regardless of employment status.

What is group life insurance and how is it different from group health insurance?

Group life insurance pays a lump-sum death benefit to the nominee if an employee dies during the policy term. Group health insurance pays hospitalisation and medical expenses when an insured member is treated. Life pays on death; health pays on treatment. They are separate policies with different insurers (life vs general/health) and serve different purposes.

Who is eligible for group term life insurance?

Any registered Indian entity with a minimum group size can buy group term life insurance. IRDAI defines a group as 7 or more members. Eligible members are full-time employees on the payroll, typically aged 18 to 65. Some policies also permit spouse cover as an add-on. Contract workers can be included as a separate schedule.

What are the benefits of offering group term life insurance to employees?

Group term life insurance protects an employee's family from income loss, strengthens the total rewards package at low per-employee cost, and qualifies as a deductible business expense under Section 37(1) of the Income Tax Act. Premium is a small fraction of group health insurance premium, so it improves benefit maturity without significantly raising the benefits budget.

Coverage and sum assured

What does group term life insurance cover?

Group term life insurance covers death of the insured employee from any cause during the policy term, unless specifically excluded. This includes death from illness, natural causes, or accident. The nominee receives the sum assured as a lump sum. Some policies add riders for accidental death, permanent disability, critical illness, or terminal illness at additional premium.

How is the sum assured determined in group life insurance?

Sum assured is set by the employer at policy design. Common approaches are a flat amount per employee (₹10 lakh, ₹25 lakh, ₹50 lakh), a multiple of annual CTC (typically 2 to 10 times), or graded by designation. Some policies tie sum assured to 24 or 36 times monthly salary. IRDAI does not prescribe a minimum or maximum.

What is the typical sum assured in a group term life policy?

Typical sum assured ranges from ₹10 lakh to ₹1 crore per employee, with most Indian companies at ₹25 lakh to ₹50 lakh. Startups often use flat sums like ₹25 lakh. MNCs and financial services companies use 2 to 10 times CTC. Higher sum assured raises premium proportionally but per-employee cost stays low.

Does group term life insurance cover accidental death?

Yes. Death by accident is covered under the base group term life policy, as long as the cause is not specifically excluded. Employers can add an Accidental Death Benefit (ADB) rider that pays an additional sum on accidental death, effectively doubling the payout. ADB is a separate rider from base GTL and comes at extra premium.

What is not covered under group term life insurance?

Standard exclusions include death by suicide within the first 12 months of policy inception (per Section 45 of the Insurance Act), death from war or nuclear risks, death from participation in criminal activity, and death from pre-existing conditions if fraudulently non-disclosed. Riders like accidental death may exclude adventure sports, intoxication, and self-inflicted injury.

Claims and nominee

Who is the nominee in a group term life policy?

The nominee is the person the insured employee designates to receive the death benefit if the employee dies during the policy term. Common nominees are spouse, children, parents, or siblings. Under Section 39 of the Insurance Act 1938, a beneficial nominee (parent, spouse, or child) has legal ownership of the payout. Employees update nominees through the employer's HR portal.

How is a group term life insurance claim filed?

The nominee, along with the employer's HR team, files a claim by submitting the death certificate, employee ID proof, nominee ID proof, and claim form to the insurer. The employer confirms the deceased was an active employee on the date of death. The insurer verifies documents and pays the sum assured to the nominee, usually within 15 to 30 days.

What documents are required to file a group term life claim?

Documents include the original death certificate, employee's ID and address proof, nominee's ID proof and bank details, the completed claim form, and the employer's confirmation of employment. Additional documents may include post-mortem report and FIR for accidental death, medical records for death from illness, and a discharge summary if death occurred in hospital.

Cost and premium

How much does group term life insurance cost per employee in India?

Group term life insurance costs around ₹300 to ₹1,500 per employee per year for ₹10 lakh to ₹25 lakh sum assured, depending on age profile, sector risk, and rider selection. Younger workforces at lower sum assured fall at the lower end. Adding accidental death or critical illness riders raises the premium proportionally.

How is the premium calculated for group term life insurance?

Insurers calculate premium as a percentage of sum assured (typically 0.05% to 0.15% per year), adjusted for the group's age distribution, gender mix, occupational risk, and prior claims experience. Sedentary office workforces pay lower rates than field-heavy or industrial workforces. Larger groups get better rates due to risk pooling.

Who pays the premium for group term life insurance?

The employer pays the premium in an employer-sponsored group term life policy. Under IRDAI rules, only the master policyholder (the employer) is billed by the insurer. Some policies allow voluntary top-up cover where employees fund additional sum assured through payroll deduction at the subsidised group rate.

Tax treatment

Is group life insurance taxable for employees in India?

No. Group term life insurance premium paid by an employer is not treated as a taxable perquisite in the employee's hands, because the premium is a pure risk cover with no accrued benefit or cash value payable to the employee during service. The employee owes no income tax on the premium. The death benefit to the nominee is separately tax-exempt.

Is the group term life premium a tax-deductible business expense?

Yes. Group term life insurance premium paid by an employer is a deductible business expense under Section 37(1) of the Income Tax Act, since it is incurred wholly and exclusively for business purposes and represents a staff welfare cost. The deduction reduces the company's taxable profit for the financial year in which the premium is paid.

Is the death benefit from group term life insurance taxable?

No. The death benefit paid by the insurer to the nominee is exempt from income tax under Section 10(10D) of the Income Tax Act. The full sum assured is received tax-free, regardless of the amount. Section 10(10D) applies to all life insurance proceeds paid on death, including proceeds from group term life policies.

Employer decisions

Should an employer offer group life insurance in addition to group health?

Yes, for most companies. Group health covers medical bills during illness or hospitalisation; group term life covers loss of income for the family if an employee dies. The two policies protect against different risks and complement each other. Group term life premium is a small fraction of group health premium, so the marginal cost is low.

What is the minimum number of employees required for group term life insurance?

IRDAI defines a group as 7 or more members for group life insurance. Some insurers accept smaller groups down to 5 lives, and a few specialised products cover 3 or more. Startups and small companies with fewer than 7 employees may need to wait until headcount grows before qualifying for a standard group term life policy.

What happens to group term life cover when an employee leaves?

Cover ends on the employee's last working day, unless the employer extends it as part of exit terms. Unlike group health insurance, group term life does not have a portability route to convert into an individual policy under IRDAI rules. Departing employees who want continued life cover must buy an individual term insurance policy separately.

Can a startup buy group term life insurance?

Yes, once the startup has at least 7 employees, in line with IRDAI's group definition. Some insurers accept smaller groups. Group term life is a low-cost, high-impact benefit for early-stage companies, typically adding ₹300 to ₹1,500 per employee per year to the benefits budget. Startups often pair it with group health as a founder-signalled talent package.

How is group term life insurance different from EDLI?

EDLI (Employees' Deposit Linked Insurance) is a mandatory life cover under the EPFO for employees enrolled in EPF, funded by an employer contribution of 0.5% of wages up to a wage ceiling. The maximum benefit is ₹7 lakh. Group term life insurance is voluntary employer-bought cover with higher sum assured, offered on top of EDLI to bridge the coverage gap.

Buying and providers

Which insurers offer group term life insurance in India?

Leading group term life insurers in India include HDFC Life, ICICI Prudential Life, Max Life, SBI Life, Tata AIA Life, Bajaj Allianz Life, Kotak Life, and LIC. Product features, claim settlement ratio, and rider menus vary. IRDAI publishes annual claim settlement data for life insurers. A broker like Plum places policies across major insurers.

How do I buy group term life insurance for my company?

Approach an IRDAI-licensed corporate broker or a life insurer's group business desk. Share employee count, age distribution, and desired sum assured structure. Compare quotes on premium, claim settlement ratio, and rider options. Sign the proposal, pay premium, and receive the master policy. Employee onboarding happens through the broker's or insurer's HR portal.

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Group Personal Accident Insurance FAQ

Answers to the most common questions Indian employers, HR teams, and founders ask about group personal accident insurance. Covers fundamentals, coverage types (accidental death, permanent disability, temporary disability), sum insured, cost, claims, tax treatment, and how GPA compares with group health and group term life insurance.

Fundamentals

What is group personal accident insurance?

Group personal accident insurance is a single policy an employer buys to cover all eligible employees against accidental death, permanent disability, and temporary disability. The insurer pays a lump sum or weekly compensation to the employee or nominee if the covered event occurs. Cover is 24 hours a day, worldwide, and applies to accidents on or off duty.

What is GPA insurance?

GPA stands for group personal accident insurance. It is an employer-sponsored policy that pays a defined benefit if an insured employee suffers accidental death, permanent total disability, permanent partial disability, or temporary total disability. GPA is issued by a general insurance company and covers accidents only, not illness. Premium is paid annually by the employer.

Read more: What is GPA insurance?

How does group personal accident insurance work?

The employer buys a one-year renewable policy from a general insurer, defines the sum insured per employee, and pays the annual premium. If an insured employee has a covered accident, the insurer pays the benefit — full sum insured for accidental death or permanent total disability, a scheduled percentage for partial disability, and weekly compensation for temporary disability.

What is the difference between group personal accident and individual personal accident insurance?

Group personal accident insurance is bought by an employer for all eligible employees under one master policy, without individual underwriting. Individual personal accident insurance is bought directly by a person for themselves, with medical and occupational underwriting. Group cover is cheaper per employee, ends when employment ends, and typically has higher combined sum insured than individual retail policies.

Read more: What is GPA insurance?

How is group personal accident insurance different from group health insurance?

Group health insurance pays hospitalisation and medical expenses for illness or accident. Group personal accident insurance pays a defined lump sum or weekly compensation on accidental death, permanent disability, or temporary disability. Health cover addresses medical bills; GPA addresses income loss and lump-sum protection. The two policies protect against different risks and are complementary.

What is the difference between GPA and GMC (group mediclaim)?

Group mediclaim (GMC) is a health insurance policy that pays for hospitalisation, surgery, and medical expenses. Group personal accident (GPA) is an accident-only policy that pays a fixed lump sum on accidental death or disability and weekly compensation for temporary disability. GMC pays hospitals for treatment; GPA pays the employee or nominee for the loss itself.

Who is eligible for group personal accident insurance?

Any registered Indian entity with a minimum group size can buy group personal accident insurance. IRDAI defines a group as 7 or more members. Eligible members are full-time employees on the payroll, typically aged 18 to 70. Some policies also permit spouse and child cover as an add-on. Contract workers can be included as a separate schedule.

What are the benefits of offering GPA insurance to employees?

GPA insurance protects an employee's family from income loss due to accidental death or disability, at a very low per-employee cost. Premium is a small fraction of group health insurance premium. It qualifies as a deductible business expense under Section 37(1) of the Income Tax Act, and it strengthens the total rewards package without significantly raising the benefits budget.

Coverage

What does group personal accident insurance cover?

Group personal accident insurance covers four defined events: accidental death, permanent total disability, permanent partial disability, and temporary total disability. Cover applies 24 hours a day, worldwide, on and off duty. Optional add-ons include medical expense extension, ambulance charges, education benefit for children, and repatriation of remains. Cover is for accidents only, not illness.

What is accidental death benefit under GPA?

Accidental death benefit is the full sum insured paid as a lump sum to the employee's nominee if the insured dies as a result of an accident within a defined period after the accident, usually 12 months. Death from natural causes or illness is not covered under GPA. For that, employers offer group term life insurance separately.

What is permanent total disability (PTD) cover?

Permanent total disability cover pays 100% of the sum insured to the employee if an accident causes total permanent loss, defined by policy schedule. Standard PTD events include loss of both eyes, both hands, both feet, one eye and one hand, or one eye and one foot. Some policies extend this to permanent inability to engage in any occupation.

Read more: What is GPA insurance?

What is permanent partial disability (PPD) cover?

Permanent partial disability cover pays a percentage of the sum insured based on the policy's schedule of injury. Loss of one thumb pays 25%; loss of one eye pays 50%; loss of one hand or foot pays 50%. The exact schedule follows IRDAI's standard PA product wording, though insurers may vary the percentages. Payout is a lump sum.

Read more: What is GPA insurance?

What is temporary total disability (TTD) cover?

Temporary total disability cover pays a weekly compensation to the employee if an accident causes total but temporary inability to work. Standard payout is 1% of the sum insured per week or a capped amount, whichever is lower, for up to 100 weeks. TTD kicks in after a short waiting period, usually 7 days. It compensates for lost wages.

Read more: What is GPA insurance?

Does GPA cover medical expenses from an accident?

The base GPA policy does not cover medical expenses. Employers can add a medical extension rider that reimburses hospitalisation and treatment costs from a covered accident, typically capped at 10% to 40% of the sum insured. Where the employee also has group health insurance, the health policy typically covers accident-related hospitalisation without needing this rider.

What is not covered under group personal accident insurance?

Standard exclusions include death or injury from suicide or self-inflicted harm, war and nuclear risks, criminal activity, adventure sports (skydiving, mountaineering), racing, drug or alcohol intoxication, pregnancy or childbirth complications, and pre-existing disabilities. Death from illness or natural causes is not covered, since GPA is an accident-only policy. Riders may add or waive specific exclusions.

Read more: What is GPA insurance?

Sum insured and cost

What is the typical sum insured in a GPA policy?

Typical sum insured ranges from ₹5 lakh to ₹50 lakh per employee, with most Indian companies at ₹10 lakh to ₹25 lakh. Common approaches include a flat amount per employee, 24 to 60 times monthly salary, or a multiple of annual CTC (2 to 5 times). Higher sum insured raises premium proportionally, but GPA remains one of the cheapest employee benefits.

How much does group personal accident insurance cost per employee in India?

Group personal accident insurance costs around ₹100 to ₹500 per employee per year for ₹10 lakh to ₹25 lakh sum insured, depending on occupational risk and rider selection. It is the cheapest of the three standard corporate policies (group health, group term life, GPA). Even large sum insured amounts add only a small line item to the benefits budget.

Read more: What is GPA insurance?

How is the premium calculated for GPA insurance?

Insurers calculate premium as a percentage of sum insured, adjusted for the group's occupational risk classification (Class I sedentary office, Class II travel-heavy, Class III field or industrial), age distribution, prior claims experience, and rider selection. Class I workforces pay the lowest rates. Larger groups get better rates due to risk pooling.

Claims

How do I file a group personal accident claim?

Notify the insurer or broker within the policy's stipulated notification period, usually 7 to 30 days from the accident. Submit the claim form, medical records, FIR or accident report, disability certificate (for disability claims), and death certificate (for death claims). The insurer verifies and pays the sum insured or scheduled percentage to the employee or nominee.

What documents are required to file a GPA claim?

For accidental death: original death certificate, FIR, post-mortem report, nominee ID proof, and claim form. For permanent disability: medical records, disability certificate from a government or empanelled doctor, and claim form. For temporary disability: medical records, fitness certificate showing period of inability to work, and payroll certificate showing lost wages. Employer confirmation of employment is required in all cases.

Tax and regulation

Is GPA premium a tax-deductible business expense?

Yes. Group personal accident insurance premium paid by an employer is a deductible business expense under Section 37(1) of the Income Tax Act, since it is incurred wholly and exclusively for business purposes as a staff welfare cost. The deduction reduces the company's taxable profit for the financial year in which the premium is paid.

Is the payout from GPA taxable for the employee or nominee?

No, in most cases. Accidental death benefit paid to a nominee and permanent disability lump sums are treated as compensation for loss, not as income, so they are not taxed in the recipient's hands. Employer-paid GPA premium is not treated as a taxable perquisite in the employee's hands, since it is a pure risk cover with no accrued benefit.

Employer decisions

Do employers need to offer both group health and group personal accident cover?

Not legally, but most Indian employers offer both because they protect against different risks. Group health covers medical bills for illness and accident; GPA pays a lump sum on accidental death or disability that group health does not. GPA premium is a small fraction of group health premium, so the marginal cost of adding it is low.

Should a company offer GPA in addition to GTL?

Yes, in most cases. Group term life (GTL) pays only on death from any cause. GPA pays for accidental death (usually in addition to GTL, effectively doubling the accident payout), plus permanent disability and temporary disability compensation that GTL does not cover. Together, GTL and GPA provide comprehensive protection against loss of life or livelihood.

What is the minimum number of employees required for GPA insurance?

IRDAI defines a group as 7 or more members for group personal accident insurance. Some insurers accept smaller groups down to 5 lives, and a few micro-group products cover 3 or more. Startups and small companies with fewer than 7 employees may need to wait until headcount grows before qualifying for a standard group personal accident policy.

Buying and providers

Which insurers offer group personal accident insurance in India?

Leading GPA insurers in India include ICICI Lombard, HDFC ERGO, Bajaj Allianz, Tata AIG, Reliance General, SBI General, and Cholamandalam MS. Public sector options include New India Assurance and National Insurance. Product features, occupational risk classification, and rider menus vary. A broker like Plum places policies across major general insurers.

How do I buy group personal accident insurance for my company?

Approach an IRDAI-licensed corporate broker or a general insurer's group business desk. Share employee count, occupational risk profile, and desired sum insured structure. Compare quotes on premium, rider options, and claim settlement record. Sign the proposal, pay premium, and receive the master policy. Employee onboarding happens through the broker's or insurer's HR portal.