Advantages And Disadvantages Of Buying A Group Health Insurance Policy

A club or association membership has advantages of its own. A lesser-known benefit of such memberships is that you can affordably cover your health. The setup does, however, have certain drawbacks. Read on to learn more.

Collective Covers

The Insurance Regulatory and Development Authority of India (IRDAI) claims that such organisations are individuals who come together for a shared objective or participate in a single economic activity. This comprises groupings of employers and employees as well as members of professional organisations, housing societies, alums, social or cultural organisations, people who own the same type of credit card, people who have savings accounts with a bank, and so on. Any group not expressly formed to buy health insurance would be eligible for group coverage.

The premium per member may be less than that of an individual cover because there will likely be many members. Additionally, pre-existing condition waiting periods and senior citizen co-pay provisions are included in retail policies. 

The Mechanisms

Contact an insurer beforehand before purchasing a group policy. Guidelines may differ between insurers about the necessary minimum number of members. To prevent the anti-selection problem, most insurers demand that all members be covered. When only older or less fit members sign up for health insurance coverage, the likelihood of more significant claims increases. A housing society should receive the majority’s consent before covering its members under a group plan. 

A proposal is evaluated by insurers using a variety of factors, including age, demography, group size, sum insured, and breadth of coverage. These elements also impact the premium. Unfavourable demography and meagre participation may act as deterrents.

Unified Under One Roof

Benefits Of Health Insurance

  • Waiver of the waiting period for pre-existing conditions.
  • Protection for all members, including senior citizens.
  • Allowable customisability, such as a list of cashless hospitals specific to you, maternity coverage, and newborn infant coverage.
  • Lower premiums as a result of the group’s stronger negotiating position. ##
  • You can avail of health insurance tax benefits **


  • In the mid-to-long term, more claims render the coverage unprofitable.
  • Increasing the number of claims could result in an insurer pulling out or higher renewal premiums.
  • As a result of increased reimbursements, insurers and group administrators could impose co-pay requirements and other limitations.
  • Due to the possibility of premium increases depending on claim experience, members accustomed to cost-effective rates may become disgruntled.

Be Wary Of Dangers

Although the advantages are clear, these group health insurance policies also include several hazards. The main risk is that the plan will fail to work. At first, the group is usually enthusiastic, and many people sign up. The applecart could be upset by one lousy year of high claims. As a result, they bargain for a reduced premium without realising the risk.

The group policy’s unique selling propositions (USPs), which include coverage for older people and PED from the start, frequently cause problems. The insurer can notify the group to pay the additional premium or accept cancellation if the claims ratio is too adverse.

Standard T&C apply.

Visit the official website of IRDAI for further details.

All savings are provided by the insurer as per the IRDAI-approved insurance plan. Standard T&C apply.

Tax benefit is subject to change in prevelant tax laws.

Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.

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