What is group insurance?

What is Group Insurance? Its Types and Benefits

Group insurance provides employees with health and life coverage, protecting against various risks. Explore its key features and benefits.

Written by : Knowledge Centre Team

2025-11-04

1999 Views

10 minutes read

Exit Pop Up

Live Life More Confidently

Get best insurance from our experts

Name is required Name should be Valid
Mobile Number is required Mobile Number should be Valid
DOB is required DOB should be Valid
Annual Income is required
Please tick to proceed further.

Thank you for your interest in our product. Our financial expert will connect with you shortly to help you choose the best plan.

Group insurance means a type of insurance plan that covers a number of people in the same contract. Such a plan provides the same level of insurance coverage to all members of a group, irrespective of their age, gender, occupation, or socio-economic status. Group insurance eliminates the need to buy a separate insurance plan for each member. Employers often provide employees with a group insurance plan as part of the benefits package. Such a plan includes coverage for group members and their spouses, children, and dependent parents.

Key Takeaways 

  • A group insurance plan should provide adequate coverage for hospitalisation, critical illnesses, maternity benefits, and wellness programmes while maintaining affordability.

  • Understand whether the policy is fully employer-funded or requires partial contributions from employees to make an informed financial decision.

  • Carefully review policy documents to ensure clarity on pre-existing diseases, waiting periods, and specific treatment exclusions that may impact coverage.

  • A seamless and efficient claim settlement process, along with a high claim settlement ratio, is crucial for ensuring quick and hassle-free reimbursements.

Types of Groups

A group insurance plan provides coverage to the followingtypes of groups:

  • Formal Group: In a formal group, also known as an employer-employee group, all members work for the same employer or group owner. A company, a business organisation, and a professional organisation are examples of a formal group. The insurance plan is purchased by the employer.
  • Informal Group: Members of an informal group (i.e., a non-employer-employee group) may belong to a society or cultural association. They may hold the same credit card or account. In such a group, the group owner or administrator purchases the policy on behalf of the group members.

Get a Customized Group Insurance Quote Now

Please enter correct name Please enter the Full name
Please enter valid mobile number Please enter Mobile Number
Please enter valid email Please enter Email
Consent is required

Enter OTP

An OTP has been sent to your mobile number

Didn’t receive OTP?

Application Status

Name

Date of Birth

Plan Name

Status

Unclaimed Amount of the Policyholder as on

Name of the policy holder

Policy Holder Name

Policy No.

Policy Number

Address of the Policyholder as per records

Address

Unclaimed Amount

Unclaimed Amount
Error

Sorry ! No records Found

.  Please use this ID for all future communications regarding this concern.

Request Registered

Thank You for submitting the response, will get back with you.

Thank You for submitting the response, will get back with you.

Features of Group Insurance

Here are some of the key features of group insurance:

  • As risk spreads over a large number of people, a group insurance plan provides standardised coverage at competitive premium rates. This means that group insurance coverage is often similar across all members of the group (as per the plan design).

  • Regardless of group size, group insurance covers all members under the same plan. The plan may be in the form of group life insurance, group health insurance, group travel insurance, or group personal accident insurance.

  • A group can comprise an employer and employees or a non-employer-employee group, such as holders of a credit card or members of a social or cultural association.

  • The group's manager obtains a master policy in the group's name (issued to the master policyholder/group policyholder).

  • A premium is charged to members or paid by the group (or shared between both, as per the arrangement).

  • A member is covered as long as they are a part of the group. The cover ceases upon a member's departure from the group, subject to the policy’s terms on exit/continuation, if any.

We at Canara HSBC Life Insurance offer group insurance plans that are a smart choice for employers and associations operating in different sectors. These plans secure the financial needs of group members and help employers meet their employee benefit payouts in an effective manner.

Benefits of Group Insurance

Purchasing a group insurance plan can benefit both group members (e.g., employees) and employers. Today, many companies prefer to cover their employees with group insurance as part of the overall compensation.

Here are the key advantages of a group insurance plan for employers and employees:

  • The premium paid for group insurance is often lower than that for an individual policy for a member. These plans reduce the liability of the insurance provider by spreading the risk across all members of the group.
  • Because premiums are often paid by the employer, group insurance offers a convenient way to cover all employees with different income brackets. These plans provide a cost-effective means for employers to provide insurance coverage for their employees.
  • Group insurance helps enhance the loyalty of employees to the employer. A group member feels valued to be a part of the group and is likely to continue their association with the group for a long period. In addition, these plans help employers create an employee-friendly workplace and a positive work environment.
  • Often, a group insurance plan may also cover family members of group members. For example, many group health insurance plans cover spouses, dependent children and parents of the group member.
  • Group members can claim tax benefits on the premiums paid on group insurance while filing their income tax returns. Employers may also claim tax benefits for premiums paid for employee insurance plans.
  • Group insurance provides standardised coverage for all members. It helps people in lower-income groups to get the same coverage as those in higher-income groups.
  • Some group insurance plans can be converted into individual plans when a member leaves a group. In such a case, the member has to pay a conversion fee.
  • Group members are often not required to fulfil individual pre-requisite conditions, such as extensive medical underwriting. On the other hand, individual insurance plans often require the policy applicant to undergo a health check-up.

Must Read - Group Term Life Insurance

trivia-img

Did You Know?

Since 22 Sept 2025, GST is 0% on individual life insurance, but group term/credit life still has 18% GST.


Source: financialservices

Save tax with Group Term Paln

Eligibility Criteria

Here are the eligibility requirements for a group insurance plan:

  • The minimum number of group members can vary in different types of group insurance plans. Some plans may require a group strength of at least 10 members. Others may require 50 members in a group to be eligible for group insurance. It ultimately depends on the insurer and the specific group product.

  • The minimum age for entry is often 18 years.

  • The maximum age may vary. Some plans have a maximum age limit of 60 years, while some allow entry till 80 years, depending on the plan terms.

  • All members must be active and full-time members of the group.

Group insurance offers a smart and convenient option to cover all members of a group under the same plan. Such a plan offers several benefits to individual members as well as the group as a whole.

Our Group Advantage Term Plan is a non-linked one-year term plan for non-employer employee groups. This plan provides life cover to group members and secures their families against the uncertainties of life. In this plan, you can opt for a fixed sum assured or a linearly reducing one. It also provides flexibility to modify the benefit and coverage.

Things to Consider Before Buying a Group Insurance Plan

When selecting a group insurance policy, it is crucial to evaluate several factors to ensure comprehensive coverage for all members. Here are some key aspects to keep in mind:

  • Coverage and Benefits: A group insurance plan should offer adequate coverage as per the plan type (e.g., group health vs group life), such as hospitalisation (in group health policies), critical illnesses (if included), and additional benefits like maternity or wellness programmes. Ensure the policy provides a balance between affordability and comprehensive protection.
  • Premium Costs: While group insurance policies are generally more affordable than individual plans, it is essential to assess how premiums are structured. Some policies require partial contributions from employees, whereas others are entirely employer-funded. 
  • Inclusions and Exclusions: Carefully review the policy document to understand what is covered and what is excluded. Pre-existing diseases, waiting periods, and specific treatments may impose restrictions that affect policyholders. 
  • Claim Settlement Process: A hassle-free and efficient claim settlement process is vital in a group insurance policy. Check the insurer’s claim settlement ratio and the ease of submitting claims, as these factors directly affect the beneficiaries. 
  • Flexibility and Customisation: Not all members of a group have the same healthcare needs. Select a group insurance plan that allows customisation, such as optional riders or top-up coverages, to enhance the overall protection. 
  • Network Hospitals and Cashless Facilities: Ensure the insurer has a wide network of hospitals offering cashless treatment (for group health insurance policies). This minimises out-of-pocket expenses and provides convenience in medical emergencies.

Conclusion

A group insurance policy is a valuable financial tool that provides essential protection to employees and members of an organisation. With multiple types of coverage available, organisations can select the most suitable policy to ensure comprehensive security for their workforce. By offering financial support in times of need, group insurance fosters employee well-being and strengthens organisational loyalty, making it a win-win for both employers and employees. 

Glossary

  1. Group Insurance Plan: A policy that provides coverage to a group of individuals, typically employees of an organisation.
  2. Claim Settlement Ratio: The percentage of claims an insurer settles against the total claims received, indicating its reliability.
  3. Riders: Optional add-on benefits that enhance a base insurance policy’s coverage, such as critical illness or maternity benefits.
  4. Medical Underwriting: Risk assessment using health history to decide cover terms, pricing, or exclusions
glossary-img
Uncertain About Insurance

FAQs

Group insurance is when an organisation (such as an employer) purchases a single policy for its members. It combines everyone into a single group, which can lower costs, and it may offer health or life insurance (sometimes for the family as well). Premiums may be paid in full by the organisation or shared with members, and claims are usually processed through the employer, either via cashless treatment at network hospitals or reimbursement.

Group life insurance typically pays a lump sum to the nominee upon the insured person's death, and the cover amount is often linked to salary. It may include add-ons such as accidental death coverage and, in some plans, accelerated payouts for specified conditions. Standard exclusions can include death during illegal acts, war-related events, certain high-risk activities, and suicide within an initial exclusion period (as per policy terms).

To understand how group insurance works, you must know that it is well-equipped for basic protection. Still, it’s typically less customisable than an individual policy and usually ends when the person leaves the employer/group.

An employer purchases a single master policy and enrolls all eligible employees. Let us understand with a group insurance example below:

  • Group life example: A company provides every employee with life cover equal to 10× annual salary; if an employee dies, the nominee receives the lump sum.

  • Group health example: The same company buys a group mediclaim plan; employees (and opted dependents) can use cashless at network hospitals or claim reimbursement.

Group insurance premiums are set using actuarial calculations. The insurer considers factors such as the number of members (larger groups often cost less per person), the group’s average age, past claim experience, the nature of work/industry risk, and the coverage chosen (higher sum insured or add-ons increase cost).

Based on these inputs, the insurer starts with a base rate, adjusts it for risk and benefits, and then applies it to the total number of covered members to arrive at the overall premium.

The meaning of group insurance can be understood as a scheme that covers many people (such as employees or association members) under a single master policy. Group insurance typically refers to a plan that offers similar benefits, such as health or life insurance, at a lower cost than individual plans because the risk is spread across a large group, enrollment is simpler, and medical examinations are often limited. Premiums are usually paid in whole or in part by the employer/organisation, which makes coverage easier to access, and the benefits generally cease when someone leaves the group. However, some insurers may allow conversion to an individual policy.

Disclaimer - This article is issued in the general public interest and meant for general information purposes only. The views expressed in this blog are solely those of the writer and do not necessarily reflect the official policy or position of Canara HSBC Life Insurance Company Limited or any affiliated entity. We make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the blog or the information, products, services, or related graphics contained in the blog for any purpose. Any reliance you place on such information is therefore strictly at your own risk. You should consult with a qualified professional regarding your specific circumstances before taking any action based on the content provided herein.

Recent Blogs

What is Group Term Life Insurance 2026?
24 Dec '25
1955 Views
7 minute read
Learn what is group term life insurance in 2026, how group term life insurance works, its benefits, features & why it matters for employees and employers.
Read More
Group Insurance
Labour Day 2025 in India: Secure Your Future with Life Insurance
01 Dec '25
1283 Views
12 minute read
Celebrate Labour Day 2025 by understanding its meaning and importance. Discover how life insurance protects India’s hardworking workforce. Learn more on Canara HSBC Life Insurance.
Read More
Group Insurance
Group vs Individual Life Insurance Policy: Which Is Better?
18 July '25
163 Views
6 minute read
Understand how group and individual life insurance differ in terms of cost, coverage, and control. Perfect for professionals, families, and anyone planning for the future.
Read More
Group Insurance
Maximize Hidden Workplace Benefits You’re Missing
30 June '25
323 Views
7 minute read
Maximise your employment perks! Learn about group insurance schemes, reimbursements, corporate discounts, and other workplace benefits that enhance financial security.
Read More
Group Insurance
How to Port Group Health Insurance to Individual Plan in 2025-26?
12 May '25
1033 Views
8 minute read
Learn how to port group health insurance to an individual plan in 2025-26. Discover process steps, benefits, and how to ensure continuous medical coverage.
Read More
Group Insurance
5 Employee Workplace Benefits You Shouldn’t Overlook in Insurance
30 Apr '25
50 Views
4 minute read
Don’t miss out on employee benefits like reimbursements, group insurance, and discounts. Learn how to make the most of your workplace perks & financial security.
Read More
Group Insurance
Group Life Insurance for Remote Employees: Benefits & Coverage Explained
29 Apr '25
346 Views
5 minute read
Learn how group life insurance supports remote employees in India. Explore key benefits, coverage options, and why businesses should include it for their workforce.
Read More
Group Insurance
What are The Advantages of Group Life Insurance Policies?
03 June '22
963 Views
5 minute read
Learn the key advantages of group life insurance policies, including affordable premiums, extensive coverage, and employee benefits.
Read More
Group Insurance

Group Insurance - Top Selling Plans

We bring you a collection of popular Canara HSBC life insurance plans. Forget the dusty brochures and endless offline visits! Dive into the features of our top-selling online insurance plans and buy the one that meets your goals and requirements. You and your wallet will be thankful in the future as we brighten up your financial future with these plans.

Empower Your People With Us

Group Advantage Term Plus
  • Short-term coverage options
  • Change coverage during the policy
  • Enhance coverage with Riders
  • Tax benefits available

Don't Let Debt Burden Your Family

Group Asset Secure
  • Flexible coverage options
  • Premium payment flexibility
  • Option to add 3 Joint borrowers
  • Get Tax benefits

Safety Net for a Grand Retirement

Group Treditional Plan
  • Low Cost Protection
  • Welfare Benefit Schemes
  • ️Death Benefits
  • Efficient fund management