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Corporate Group Health Insurance – An Intro

As the name implies, Corporate Group Health Insurance is wherein the employer provides healthcare coverage to the employees (which in many cases extends to the employees' family as well). For working professionals, a group health insurance plan is one of the most lucrative perks offered by employers.

More often than not, these plans are uniform, offering the same features and benefits to all the members of the group being insured.

Corporate health plans are usually of two types:

  •   Contributory plans wherein the group member/employee needs to pay a part of the premium along with the employer.
  •   Non-contributory plans wherein the employer pays the premium in full.

The biggest benefit of group health insurance is that it is way cheaper than individual health plans (per person). Hence, it is beneficial for those people who cannot afford a decent health cover by themselves. The insured group member/employee should never hesitate to question the features and exclusions of the plan being offered by your employer.  

The reason why it comes at a subsidized rate is simple to understand, the risk taken by the insurer is spread over a number of people rather than a single person, thus thinning it out. One might wonder, how is the premium set on corporate group health insurance plans. Here’s how it works. The insurance company assesses the risk factor on each member enlisted in the plan. Subsequent to that, the risk factor is blended and the premium is fixed on the averaged risk factor of the group.

It is mandatory under law to for businesses, with more than 50 employees, to provide group health insurance plan. Businesses with less than 50 employees are not legally obliged to do so. But it is recommended by the industry experts than ideally they too should get their employees insured.  

It is always better to get an individual health insurance plan even if your employer has got you insured. The reason being, that corporate health plans are valid only as long as you are an employee of the company. So obviously your group health plan will cease to cover you when you leave your current organization. The new organization that you join might give you a lower health cover that would not suffice your healthcare needs or it might not offer a health cover at all. Hence, it is imperative to get an individual health insurance plan as well.