Group health insurance provides a range of benefits to both employers and employees. It can help improve the overall health and wellbeing of employees by providing more affordable and comprehensive health insurance options.
What is Sum Insured in group health insurance?
The sum insured is the maximum amount that an insurance company will pay for your medical expenses as per your health insurance policy. Depending on the terms and conditions, the amount the employer selects as sum insured, the insurance company will cover that much of an employee’s medical expenses.
Let’s understand this with the help of an example:
If your sum insured is Rs. 3 lakh, then the insurance company will pay for your medical expenses up to a maximum of Rs. 3 lakh, as per your policy terms and conditions. Expenses exceeding the sum insured will have to be paid by the insured person from their pocket. Choosing the right sum insured for your employees is the most important part as it will cover potential medical expenses.
There are terms and conditions applied, which make it necessary to understand the policy properly. Options to increase the sum insured during the policy term are also available, which depend on the company from which you have bought insurance.
It can help you effectively utilise your health insurance benefits and protect yourself and your loved ones against medical uncertainties.
What is the impact of sum insured on the premium?
The sum insured directly affects the premium in group health insurance. The insurance company will have to pay the employees a high amount when claimed. Due to this, the insurance company charges a high premium if the sum insured is high.
The higher the sum insured, the higher is the premium.
When can you choose the sum insured?
At the time of buying group health insurance, the insurer explains all the terms and conditions mentioned in the policy. The insurer will ask the employer to select a sum insured, which is the maximum amount an employee can access.
It is wise to discuss the needs and requirements with the employees and then decide the sum insured. It is because if an employer selects a lower sum insured and the company’s employee faces an emergency exceeding the maximum amount chosen, the employee will be forced to pay from their pocket. This may lead to mental stress and financial issues.
What if the sum insured gets exhausted?
When the cost of medical treatment exceeds the limit of the sum insured, the insured person will be responsible for paying the remaining amount. This in health insurance is termed as sum insured exhausted. When choosing group health insurance for your employees, it is advised to carefully consider the sum insured. Having too little coverage can leave your employees in financial burden.
Benefits of choosing the right sum insured
It is advised to choose the right sum insured while buying group health insurance, to ensure that your employees do not have to suffer from financial problems.
- Maximum financial coverage:
If you choose a high sum insured, keeping the needs and requirements of your employees, it will provide them financial coverage. Insufficient sum insured can lead to out-of-pocket expenses.
- No need to buy multiple claims:
If you choose a plan with a high sum insured for your employees, they won’t have to worry about having multiple claims for emergencies. Making multiple claims can be time-consuming and tedious. To avoid this, it is better to be wise before buying plans.
- Use the same policy till the year-end:
Lower sum insured can get exhausted fast and will leave our employees in stress for the rest of the year. The right sum insured can help you claim the end of the policy period.
Factors to consider while deciding sum insured
There are several factors to consider when deciding the amount of sum insured while buying a group health insurance policy. These can include,
- Pre-existing disease: If your employees have a pre-existing medical condition or are at a higher risk for certain illnesses, you can choose a higher sum insured to ensure that you have adequate coverage.
- Geographical area: The cost of medical treatment can vary depending on where your employees live. In some areas, medical care may be more expensive, so you can select sum insured accordingly to cover those potential costs.
Budget of the organisation: Choosing a higher sum insured will typically result in higher premiums, so it’s essential to consider your budget while deciding on the right amount of coverage for you