Top 20 Reasons You Must Invest in Group Health Insurance for Small Businesses



If you’re a company, start-up, small business, or large organization of any kind, it is important to consider opting for group health insurance.

A group health insurance, as the name suggests, is a health insurance policy that covers several people together. Hence, the entire staff or members of an organization can be covered within a single policy.

There are several benefits of a group health insurance policy for small businesses, the top 20 of which are covered below:

1.       It’s More Cost-Effective

Insurance providers are willing to offer group health insurance for MSMEs at a lower per-head cost than individual policies. This is because the overall value of the policy for the insurance provider is much higher. Companies and organizations can negotiate a lower price depending on their needs and requirements.

2.       It Works as an Employee Benefit

Companies can offer comprehensive health insurance as an employee benefit. Such benefits help the company because a healthier employee is more productive. Since companies can provide such benefits at scale, it reduces the overall cost for the company.

3.       Better Terms and Conditions  

Since companies and organizations are buying health insurance for a large number of people, insurance providers are willing to provide better terms and conditions at the same cost, compared to a single health insurance policy or a family health insurance policy

4.       It Enables Superior Medical Care

Since the terms and conditions of group health insurance for small businesses are better, employees or members can avail of better health care at a lower cost.

5.       It Helps with Retention and Hiring

Employees are more likely to join a company that takes care of all their needs. Since medical costs are a prime concern for most people, offering health insurance as a benefit can help with hiring and retention.

6.       There are Tax Benefits

Companies that offer health insurance as an employee benefit can take advantage of tax benefits under Indian tax law.

7.       It Provides Preventative Care

Most group health insurance for start-ups comes with free annual check-ups and free routine medical tests.

8.       There is No Waiting Period

In contrast to individual health policies which have a thirty-day to sixty-day waiting period before the insured can make a claim, a group health insurance policy does not have any such waiting period.

9.       The Claim Process is Simpler

The claim process is highly simple for group health insurance for small businesses. You have the option of availing a cashless claim (where the amount is paid directly to the hospital) or a reimbursement claim (where you can make the claim yourself and receive the funds in your bank account).

10.   It Helps Company Culture

Company’s which provide health insurance to their employees are rated better for their culture. Providing health insurance is a sign that the company cares for its employees, and this helps with productivity, culture, and retention.

11.   You Can Use a Mobile App

Usually, insurance providers that offer group health insurance for start-ups have a smartphone or mobile app. This app can be used to check your policy details, make claims, and track any claims. Overall, mobile apps help make it easier to interact with your insurance provider and avail their services.

12.   Higher Sum-Insured

A group health insurance policy can have a higher sum insured when compared with an individual health insurance policy. Since group policies cover a large number of people, insurance providers can afford to offer a higher sum insured.

13.   Covers Dependents

A group policy does not just cover the employee or the member of the organization. It can also cover the dependents of that employee or member such as spouse or children or even parents.  

14.   Discounts and Waivers

Since the overall value of group health insurance for MSMEs are much higher than individual policies, insurance companies are willing to offer discounts and waivers. This lowers the overall cost of the group policy for your company or organization.

15.   Cashless Claims are Easier

If you are part of a group health insurance policy, then making a cashless claim at a network hospital is easier. This is because the process involved for making a claim under a group policy is simpler than an individual policy.

16.   Easy Application Process

Companies and organizations can avail a group health insurance policy quite fast. Insurance providers have kept the process as simple as process in order to attract customers. Since such policies are of high value to the insurance provider, you will receive a hassle-free application process.  

17.   Dedicated Customer Support

A group health insurance for start-ups can cover hundreds of people. This means that the insurance provider can afford to provide dedicated customer support. You can talk to the assigned customer support manager for any questions or issues relating to your policy.

18.   Covers Pre-Existing Diseases

For an additional cost, a group health insurance policy can cover pre-existing diseases from the first day of the policy. This is much better than individual policies which don’t cover pre-existing illnesses until 2 to 4 years after the policy has been availed.

19.   Quality of Service is Higher

Companies and organizations can expect high-quality service from their insurance provider. Insurance providers value your business and they make it a top priority to ensure that your insurance experience with them is as hassle-free and friendly as possible. Insurance providers are also more willing to go the extra mile for group policyholders.

20.   Lifetime Renewability

Group health insurance for small businesses can be renewed as many time as needed. Hence, you can renew the same policy again and again without the annual hassle of choosing and applying for a new policy. Further, this allows companies and organizations to develop a better relationship with their insurance providers.

Wrapping Up

Group health insurance policies are perfect for small businesses, MSMEs, and start-ups. It helps to develop a better work culture and employees feel like they are part of a family. It’s also quite cost-effective for an employer to provide such a benefit to their employees.

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Susheel Agarwal

Susheel is the CEO of Ethika Insurance Broking P Ltd. This company, which has a current value of 10 million dollars, was bootstrapped by him and two of his friends. He attributes his success to his ability to inspire others to seek happiness at work.