Group term life insurance to become expensive by 10-15%; employees may face deductions in salary

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

Most companies have made preparations to increase the premium of group insurance by 10 per cent to 15 per cent. The pressure on group mediclaims is increasing due to the continuous increase in the burden of COVID related claims and medical inflation, and the loss ratio of companies has increased significantly in the recent past, Shah said. Government general insurance companies hold up to 70 per cent stake in group mediclaims.

Citing his top sources, he said that a consistent increase in the loss ratio of companies in group insurance has led to this decision.

Public Sector Undertaking (PSU) general insurance companies have a 70 per cent share of the group insurance business. The pressure also increased due to companies experiencing increased claims due to the pandemic.

What Is Group Term Life Insurance?

A group term life insurance policy covers multiple individuals under one contract. The most common group is a company, where the contract is issued to the employer and then offered to the employees as a benefit. Employers typically offer a base level of group insurance coverage for free, with the option to purchase supplemental coverage as well as coverage for employees' spouses and children.

The IRDAI has requested all the regulated entities- insurers, intermediaries- to make use of this initiative and offer pragmatic solutions to reduce the significant insurance penetration gap in the country.

The interested regulated entities may register their interest to participate on the email - sdd@irdai.gov.in by making a captioned subject " Open House at 15th " by the 10th of every month, IRDAI said.