Health services are getting expensive day by day. If there is a chance of hospitalization due to some serious illness, then not only the budget gets messed up but the future financial goals are also badly affected as sometimes one has to spend his savings also for the treatment. In such a situation, health insurance is becoming increasingly popular with time. You will not only have an individual policy and also if you work in any company then you will also have group insurance. Group insurance is what companies give to their employees. It has both advantages and disadvantages. Let us know about them in detail.
what is the benefit to the company
If the company takes group health insurance for its employees, then this is its expenditure. The company can take exemption from income tax on this expenditure, this is its big advantage. That is, there is a tax benefit. Apart from this, the trust of the employees in the company increases, so the employees stay connected with the company for a longer time. A long term relationship remains. Suppose you work in a company and you have group insurance of 5 lakhs. Now if a member is hospitalized in your house and if you get 2 or 3 lakh expenses under the group insurance of the company, then you become more loyal towards the company.
loss to the company
Can become a burden for the company. The premium may increase every year and the company has to bear the burden of this compulsorily. The company cannot even ask the employee to pay the premium nor can the policy be terminated midway. If the company is a start up and there are ups and downs in its business, still the premium will have to be paid.
The company does not deduct any premium from the employee’s salary for this. That is, this policy remains free. This is its big advantage. Many companies also do sharding i.e. sharing 50%-50% of the premium between the employer and the employee. Still, you will get less expenses because half the premium will be paid by the company. The second advantage is that your entire family gets an insurance cover. That is, apart from husband, wife and child, parents can also get its benefit. In many policies, the mother-in-law also gets its cover. Apart from this, there is a cashless policy and its benefit is available on hospitalization anywhere in India.
The biggest advantage of group health insurance plans is that they do not have a waiting period. This is usually the case in a regular health plan. In the insurance policy, there is a waiting period for the treatment of diseases. This is also called the cooling period. The insurance company is not liable to pay the claim during this period.
Due to this, the settlement of claims is relatively high. Medical examination is not required. The premiums of group health plans are low because a large number of people are insured. In this way, the insurance company benefits in a big way.
damage to employee
The disadvantage of group plans is that the insurance companies or institutions do not extend the insurance. This way you cannot depend on them for your medical coverage needs. In contrast, in a regular plan, the insurance company has to renew the policy legally. Even if you have already taken the claim.
If you have not taken an individual policy, then if you change the company, there will be no group health policy in the new company, then you may suffer loss.
If the company has closed the insurance policy due to slowdown in business or any other reason, then you will suffer loss because it is not compulsory for the employer.