Group Insurance Schemes

Employee Benefits typically refers to retirement plans, health insurance, life insurance, accident & disability insurance as far as the contribution of insurance is concerned.

There are several more Employee Benefits that companies offer ranging from vacations, company cars, stock options, education loans support, and so on. However, while such perquisites are manageable by Human Resources and Management in small and medium companies fairly easily, one of the key challenges is in providing Employee Benefits to cover Insurance schemes to employee groups which are small in size. The reason for this is typically as a result of the type of products that are offered to employer groups by Insurance companies in India and much the world over.

Group Insurance Schemes provided by Insurers are what employers in India buy to cover their employee base. In insuring groups, employers get favorable rates bundled with unique services and features which are by and large not available to small groups.  The catch is that most of these schemes can only cover groups exceeding 20-25 persons. As a result small employers end up not covering their employees as they are unable to get covered under traditional group plans,. While the cost variance is marginal for small groups in going for group schemes versus individual plans to cover their employees, typically small employers do not have the bandwidth to keep track and keep seeking insurance covers on a one on one basis for their recruits. Bottom line, the lack of benefits can end up becoming a serious deterrent for hiring and retaining good employees, especially those who come from larger corporates where they have enjoyed great benefits.

Till such time as a strong online solution is presented, the small employer group will always find it a challenge to provide competitive benefits to their employees. While the cost to the company will remain a negligible component to overall costs, the value it can bring in the event of adversity will go a long way in creating a positive image of the company and its promoters and securing the well being of their employees.

The most popular group schemes in the market are as follows:

Group Medical Insurance - covers employees for fixed sums against hospitalization costs and can be extended to cover spouse, children and dependent parents)

Group Term Insurance - covers employees to provide death benefit to employee’s family/nominee for a fixed sum which can be based on salary, graded slabs or a flat sum across employees.

Group Personal Accident Insurance - similar to Group Online Term Insurance Plans In India, this plan also covers employees to provide death benefit but only in the case of Accidental Death. A group accident plan also provides disability benefits as a result of accident.

Group Travel Insurance - As a lot of employers in India especially in the IT sector have frequent travelers to international client locations, such a plan makes it simple for HR to cover their employees with international medical insurance and also makes it very cost effective.

Group Gratuity - As this a fixed sum factored by employers and mandated by the law, the Gratuity scheme also provides for a life cover linked to the amount of money due. In the event of an employee dying, the dependents are due to be paid the Gratuity due even if under 5 years and this can become a serious burden for employers. Hence it is advisable to manage the money as well as life protection from insurers.

Source: http://blogs.rediff.com/terminsuranceplans/2016/07/20/ritikashah11998-3/