Group Insurance

What is group insurance?

This is a type of insurance that covers a defined group of people. This may include life insurance, health insurance and or some other types of personal insurance. 

How does group insurance work?

By getting coverage through a provider on a “wholesale” basis for its members, the coverage costs for each individual worker or member are much less than if they had to purchase an individual policy.

When you are a beneficiary of group insurance, the premium cost on an individual basis is not individually risk-based.

Typically the policy owner is an employer or an entity such as a labour organisation and the policy covers the employees or members of the group. Those who are covered typically receive a certificate of insurance that serves as proof of insurance but is not actually the insurance policy.

When group term insurance is provided through your employer, the employer usually pays for most of the premiums.

What happens if you lose or leave your job?

The group term coverage remains in force until your employment is terminated or until the specific term of coverage ends. You may have the option of converting your group coverage to an individual policy if you leave your employer. You should however beware of high conversion premiums.

What are the benefits of getting group insurance?

The main objective of group insurance is to provide cover at lower premiums to segments of the country that may not be able to afford individual policies. Many people in the country cannot afford individual policies, so group insurance helps to remedy this situation.

Premiums are usually offered at lower costs as there are many people covered by the policy.

You have ease of payment as premiums are deducted from the salary of the employees.

It can be a useful way of raising employee morale.

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