Cash Deposit (CD) Balance in Group Health Insurance

A cash deposit (CD) balance in a group health insurance account is made for the HR/employers with the insurance company to maintain the endorsement and servicing such as adding or deleting an employee as well as used to hold money that is intended to be used to pay for medical expenses incurred by the insured employees.

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How Does Cash Deposit Account Function?

Initially, the employer will have to deposit a buffer amount in the CD account so that the insurer will have to bear the credit balance maintained in the account. 

CD Balance Policy

However, these accounts do not bear any interest on the amount lying with the insurer. So, whenever an employee joins, the insurance policy is purchased through endorsement and the amount gets deducted from the CD account. 

Apart from this, when an employee leaves the company, the paid amount gets refunded to the CD account. Hence the objective of a cash deposit account is to hold the buffer amount

Why is it Important to Maintain a Healthy CD Balance?

Group health insurance covers commences only after the premium has been paid for that employee who recently added/Joined. If you maintain a healthy CD balance in insurance, the newly joined employees will be covered from their date of joining. Therefore, it is important for HRs/employers who hold group health insurance policies to ensure that their CD account balances are as high as possible.

Balance to Maintain in CD Account

It is important to keep at least 10% of your total premium in a CD account so that you are prepared for any aggressive hiring plans.

Case Scenario: If the total premium for your group health insurance policy is Rs 1 Lakh then it is recommended to keep Rs 10,000 extra loaded in the CD account.

Conclusion

it is important for group health insurance holders in India to maintain a healthy Cash Deposit Balance. This allows the company to pay out claims quickly and efficiently, while also providing peace of mind to policyholders. By keeping your CD balance above a certain level, you can ensure that your coverage remains active and uninterrupted.

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Written By: PolicyBazaar - Updated: 23 September 2022

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Policybazaar for Business - Group Health Insurance - Customer Reviews
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4.4/5
Based on 189 reviews
4.4
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Based on 189 reviews
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3.8 April 09, 2023
Mansi
Excellent Support
It was easy to buy insurance from PolicyBazaar website and customer support was also amazing to clear all the doubts.Thankyou. Highly worth it.
Dehradun
4.3 April 01, 2023
Mahesh
Necessary Investment
It is a good and necessary investment. Thanks PB.
Lucknow
4.3 March 24, 2023
Surya
Provides Satisfactory Results
I purchased Group health insurance at policybazaar recently and i am so much satisfied with the plan. The application process was smooth and efficient, making the typically tedious task of getting insurance surprisingly hassle-free.Thanks PB.
Bareilly
3.8 March 16, 2023
Naveen
Helpful In Making Decisions
When it came to selcting the right Group Health Insurance, Policybazaar offered an impressive range of options from reputable insurers. I appreciated the comprehensive details avalable for each policy which helped me to take the better decisions. Thankyou.
Delhi
4.3 March 15, 2023
Rajesh
Increases Clients Expectations
I recently had the pleasure of securing a Group Health Insurance policy throug PolicyBazaar and I must say the Entire process exceeded my expectations! From start to finish, their service werw great. Thankyou.
Delhi
3.8 March 02, 2023
Ravi
Great Experience
I got great deals on PolicyBazaar website. Highly recommend.
Pune
4.3 February 17, 2023
Diljeet
Excellent Purchase
It was a excellent purchase at PolicyBazaaar. Thankyou team.
Coimbatore
4.3 February 04, 2023
Satya
Prompt Services
Policybazaar's efficient claims process was impressive. In case of any medical emergencies, my employees were able to get their claims settled swiftly, allowing them to focus on their health and recovery without worrying about financial aspects.Thankyou
Chennai
4.3 January 22, 2023
Abhishek
Budget Friendly Purchase
Thankyou PolicyBazaar for providing such a great plan at affordable premium rates. It was a budget-freindly purchase.
Delhi
4.3 January 09, 2023
Abhash
Multiple Range Of Benefits
I purchased Group health Insurance which offered me plans with affordable rates Thankyou PB.
Pune