Cancellation Of Group Health Insurance By Policyholder
It is suggested to learn about the coverage while purchasing a group health insurance policy. In case you have purchased a group health insurance policy and find that the employees are not satisfied with the coverage then you just have to inform the insurer prior cancellation of the policy. Most of the insurance companies have a notice period of 30 days but it varies from one company to another.
What you need to understand here is that your employee will not be able to raise a claim during the notice period. In this case, it is suggested to keep a backup option ready so that any of the employee willing to raise a claim can do so and get proper coverage for the hospital expenses.
Once the notice period is over, the insurer will cancel the group health plan and refund the premium amount that was not utilized during the tenure that will exclude service tax. Also, remember that the insurer will only give you the refund when none of your employees has raised a claim during the policy tenure.
The refund of the premium amount also depends on the time passed since the initiation of the group health plan. It means that if the policy duration of your insurance plan is about to end then you may not get any refund. Have a look at the table below to under the percentage of refund you would get after the cancellation of the group health insurance plan.
Automatic Cancellation of Group Health Insurance Policy
The insurance company automatically cancels the group health insurance plan in case of the sudden demise of the insured. Then the insurer makes the refund on the basis of above mentioned parameters. Also, if the insurer has raised a claim then no refund will be provided.
For instance, Ramesh works under the ABC company. During the course of his employment, he has raised a claim once. Due to his sudden demise, the insurance company cancels the insurance policy. Since he has raised a claim once the insurance company will not provide any refund.
Cancellation of Group Health Insurance By Insurance Company
The insurance company can cancel your group health insurance policy. For that, they too have to provide a 30 days notice period. They will also have to refund the unused premium amount only if no claims have been raised during the policy tenure. The parameters of the refund stay the same.
Dishonest Act By Insured
If any person on behalf of the insured or the insured person himself has acted dishonestly, the insurer can cancel the policy.
Misrepresentation of Material Facts
If the insured has not represented the material facts transparently, the insurer can cancel the group health insurance plan.
Non-Renewal of Insurance Policy
Not renewing the insurance policy on time is one of the reasons why the insurer cancels the group insurance plan. If the insured does not renew the insurance policy before the expiry date, the insurance plan lapses, however, the insured gets a grace period during which he/she can renew the insurance plan to get continuous coverage under the group health insurance policy.
