Introduction
Most salaried Indians get at least one insurance policy without ever filling a form. It comes through their employer — called Group Insurance.
Group insurance is not just about employees in IT firms. Banks, housing societies, trade associations, even self-help groups are using it today. In 2025, more than 40 crore Indians are covered under some form of group insurance. But many don’t even know what benefits they have — or the limits hidden inside.
This guide explains how group insurance works, why it matters, and what to watch out for.
What is Group Insurance?
Group insurance is a single master policy taken by an employer or an association, covering multiple people under one contract.
- Employer pays premium (sometimes fully, sometimes shared).
- One certificate of insurance is given to each member.
- Premium is lower because risk is pooled.
Example: Infosys buys a ₹5 lakh group health cover for 1,00,000 employees. Because of scale, the per-employee cost is just ₹5,000, far cheaper than an individual buying the same policy.
Types of Group Insurance
- Group Health Insurance
- Covers hospitalisation and medical expenses of employees and dependents.
- Very common in IT, banking, and manufacturing.
- Group Term Life Insurance
- Pays nominee if an employee dies during service.
- Usually 2–3 times annual salary.
- Group Personal Accident Insurance
- Covers accidental death, disability, partial disability.
- Group Travel Insurance
- Used by companies sending employees abroad.
- Special Group Schemes
- PMJJBY (Pradhan Mantri Jeevan Jyoti Bima Yojana) – life cover ₹2 lakh at ₹330/year.
- PMSBY (Pradhan Mantri Suraksha Bima Yojana) – accident cover ₹2 lakh at ₹20/year.
- Banks often auto-enroll customers into these.
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Group vs Individual Insurance
| Feature | Group Insurance | Individual Insurance |
|---|---|---|
| Premium | Lower, bulk discounted | Higher, depends on age & health |
| Medical Check-up | Usually not required | Mandatory in many cases |
| Customisation | Limited, chosen by employer | Full choice (sum insured, riders) |
| Continuity | Ends if you leave employer/group | Remains as long as you pay |
Takeaway: Group is cheap and instant, but not lifelong.
Premium Examples (2025)
| Group Type | Cover | Annual Premium per member |
|---|---|---|
| IT company employees (age 30) | ₹5 lakh health cover | ₹5,000 – ₹6,000 |
| Bank employees | ₹10 lakh health + ₹10 lakh term | ₹9,000 – ₹12,000 |
| Self-help group rural women | ₹2 lakh life (PMJJBY) | ₹330 |
| Co-op housing society | ₹2 lakh accident cover (PMSBY) | ₹20 |
*Indicative premiums, insurer portals 2025.
IRDAI Rules & 2025 Updates
- Standardisation: Insurers must give clear disclosure of what’s covered and excluded.
- Portability option: Employees can convert group policy to individual cover when leaving job.
- Mental health coverage: From 2024, all group health policies must include mental illness treatment.
- Waiting period relaxations: Many group policies now cover pre-existing diseases from Day 1.
Why it matters: Employees now get more real coverage, not just token benefits.
Pain Points Indians Face
- Coverage ends when job ends: Many discover they are uninsured after resigning.
- Low sum insured: ₹3–5 lakh is often not enough for modern medical bills.
- Dependents not always covered: Parents excluded in most corporate plans.
- Lack of awareness: HR departments rarely explain the fine print.
Story: Ramesh, 40, left his job in Gurgaon. Within 2 months, his father was hospitalised with liver disease. His group cover had ended, and buying an individual plan at that age cost ₹35,000/year with 3-year waiting period.
Tax Benefits
- Premium paid by employer → not taxable for employee.
- If employee pays contribution, he can claim under Section 80D.
- Example: You contribute ₹6,000 annually for group health — you can claim deduction.
Future of Group Insurance in India
- More gig workers and freelancers will be included through platforms like Swiggy, Ola, Zomato.
- Wider adoption in housing societies and associations.
- Digital onboarding and WhatsApp claim filing already piloted.
- Hybrid models where employer + employee split premiums.
FAQs
Q. Can I keep my group cover after retirement?
Some companies allow conversion, but premium rises sharply.
Q. Does group insurance cover parents?
Only if employer includes it. Many exclude to keep premiums low.
Q. Can I have group + individual both?
Yes. During claim, you can use group first, then individual.
Q. Is group cover enough?
Usually no. Take at least one personal health policy.
Group insurance is a great starting point — quick, cheap, and often employer-funded. But relying only on it is risky. Always supplement with an individual plan.
This guide is prepared by eBharat.com — verified with IRDAI updates (2025).
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