Group term life insurance will become expensive by 10-15%; employees may face payroll deductions

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If you have taken out health insurance for yourself and your family through your employer’s group insurance policy and your premiums are also deducted from your salary, the deduction can be increased, reports Anurag Shah of Zee Business.

Most companies are prepared to increase the group insurance premium by 10 to 15%. The pressure on group medical claims is increasing due to the continued increase in the burden of COVID-related claims and medical inflation, and the rate of business claims has increased significantly in recent years, Shah said. Public general insurance companies hold up to 70% of the capital of collective health insurance.

Citing his main sources, he said a steady increase in the loss ratio of group insurance companies led to the decision.

The general insurance companies of public sector companies (PSU) hold 70% of the group insurance business. The pressure has also increased due to increased claims from businesses due to the pandemic.

What is group term life insurance?

A group term life insurance policy covers several people under one policy. The most common group is a business, where the contract is issued to the employer and then offered to the employees as a benefit. Employers generally provide a basic level of group insurance coverage free of charge, with the option to purchase additional coverage as well as coverage for employees’ spouses and children.

IRDAI has called on all regulated entities – insurers, intermediaries – to take advantage of this initiative and come up with pragmatic solutions to reduce the large insurance penetration gap in the country.

Interested regulated entities can register their interest in participating on the email – [email protected] by making a subject captioned “Open House at 15th” before the 10th of every month, IRDAI said.

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