An online survey conducted by ET Wealth revealed that almost half the health insurance buyers (48%) are not satisfied with the features and benefits of their policies. This dissatisfaction is also echoed by plenty of group health insurance buyers.
For any organization looking to buy group health insurance, it is important to understand what group health insurance entails and different aspects to consider. However, it is equally important to understand the terms and conditions involved in the termination of the policy.
So, here are three scenarios that lead to the cancellation of Group Health Insurance:
If you’ve bought group health insurance for your employees that you are dissatisfied with or have other reasons and wish to cancel the policy, then you’d have to give prior notice to your insurance company. While most companies set the notice period at 30 days, some may have a shorter or longer duration too. You must check the notice period at the time of purchase.
An important thing to remember here is that your employees will lose the ability to make claims during the notice period. So a good thing to consider would be having a replacement ready for them, in lieu of the present insurance.
Once you’ve given your notice, your insurer will cancel the policy for the remaining policy coverage period and refund the unutilized premium (excluding service tax). But please note that you will get the refund only if there have been no claims under the policy by any of your employees.
The refund also depends on the time that has passed since the issue of the policy. That means if your policy duration is almost ending, you may not be entitled to any refund. The percentage of refund that you get is based on the following parameters:
In the case of the death of the policyholder, the policy coverage is automatically terminated. And the refund is made following the similar parameters as above if there have been no claims made under the policy.
Just like you, the insurer also has the right to cancel group health insurance. They too are required to provide you with a notice of 30 days (or whatever’s mentioned in the agreement) and they are liable to refund the amount of the premium. However, the conditions and parameters of the refund stay the same. You’d be given a refund only if there’s been no claim and based on the duration of the term that has already passed (as discussed in the table above).
This refund policy, however, does not apply if any of the two scenarios below are true:
Apart from the three scenarios, there are two other aspects that you must know while canceling group health insurance:
Are you looking to cancel your existing group health insurance? What are some of the common pain points that led do this decision? How about trying Plum as an alternative?
Plum offers affordable group health insurance plans starting at just ₹999/year for groups as small as seven in total. If you are looking for a better health insurance option, talk to us and share your needs by signing up at plumhq.com and we’d get back to you within an hour to understand your requirements.