What is Sum Insured in Group Health Insurance

Group health insurance has been one of an employer’s critical perks to its workforce. It shows that the organisation cares for its employees and their well-being. However, there are specific terminologies that employees should be aware of regarding the company’s health insurance policy, one of which is the sum insured for the corporate health insurance.🏥

What is Sum Insured?

Sum insured is the estimated amount that the insurance company will pay for the employees’ medical expenses. It is the upper limit beyond which the insurance company is not liable to pay the medical costs 💵

Example: Suppose Karan gets hospitalised. He is covered under a group medical healthcare cover with an insured sum of INR 2,00,000. His medical expenses turn out to be INR 1,40,000, and the company approves the claim of INR 1,30,000 after the deductibles as per the policy terms.

Again in the same year, Karan gets hospitalised, and this time, his medical expenses turn out to be Rs. 90,000. However, this time, Karan will only be able to claim INR 70,000 as out of the insured sum of INR 2,00,000, Karan utilised INR 1,30,000 during his initial hospitalisation. This leaves him insured for INR 70,000 for his second hospitalisation. Thus, expenses incurred above the sum insured of INR 2,00,000 shall be borne by the employee.

Factors to be Kept in Mind while Deciding the Sum Insured

When you decide on the sum insured, you should keep the following points in mind:

• Assess your Employees’ Needs: The sum insured is one of the most important factors for medical insurance. It should be reasonable enough to ensure that most medical expenses get covered and the burden of medical treatment costs does not fall upon the employees’ shoulders. Remember, too low a sum insured defeats the entire purpose of medical insurance, leaving your employees vulnerable to the uncertainties of life, which will directly affect your organisation.
• Be Aware of the Benefits: The primary purpose of health insurance is to provide compensation for medical treatment expenses incurred by employees. However, medical insurance also offers various benefits such as routine health checkups, telemedicine, etc. While deciding the sum insured, determine the ancillary benefits that the insurance company will provide.
• Base Policy and Add-ons: A group insurance scheme provides the base medical coverage as per the policy terms. You can determine a sum insured that will be provided to all employees, allowing them the option to upgrade their policy as per their needs to enhance their protection. To enhance security, various add-ons and riders are available.

For instance, if your employee wants to avail of a more significant sum insured, they can opt for the same. Also, certain diseases not covered in the base policy can be covered using the add-ons at a low cost. This can include maternity coverage, accidental cover, pre-existing disease cover, etc. 😄

Things to be Taken Care of While Opting For a Group Insurance

While you have understood the meaning and importance of sum insured, let’s go through the key points that should be taken care of while opting for a group health insurance:

• Cover New Employees: Generally, if you choose a health insurance cover for the first time, you have to go through a waiting period, during which your pre-existing diseases are not covered in the insurance plan. Thus, suppose a person has diabetes when getting health insurance, and the plan contains a waiting period of 2 years. The insurance company won’t compensate the employee if they are hospitalised during the waiting period.

However, in the case of group insurance, employees join and leave the organisation. Therefore, it is essential to provide cover from the first day. Thus, you can always choose a plan that provides health coverage to your employees from the very beginning when they join the organisation.🧑🏻🤝‍🧑🏻

• Customisable Plans: Each employee and their family have different needs when it comes to health insurance. Therefore, with group health insurance, you can provide customisable plans that can help them manage new and old employees and their dependents.
• Claim Settlement Ratio: The claim settlement ratio is the ratio of the number of claims settled against the number of claims received by the insurer. You should go with an insurer with a higher claim settlement ratio as it increases the chance of getting the claim approved.
• Terms and Conditions: Lastly, when getting health insurance, it is essential to read all the terms and conditions of the policy.

Why Plum?

Plum has been a dominant expert in the group health insurance segment. We will help you select the perfect plan for your team, whether for 1000 employees or 10. Plum provides an admin dashboard with multiple functionalities to manage your group’s medical benefits. You can conveniently invite and remove employees and add and modify their details. Apart from this, the employee dashboard can help your employees check their policy details, start the claim process, and check the status of their claims. The traditional claim process has been done away with! Now, you can use WhatsApp to start a claim, download a health card, check the policy details, and much more with ease and freedom📝