Group health insurance is a dynamic policy. It is a plan that offers financial coverage for a group of people, often employees in a company, under one insurance plan. This type of insurance operates the same way as general policies. However, these plans have different features and functions.
Calculating the cost of group health insurance is a unique feature. Unlike other general policies, this policy covers multiple subjects. The group health insurance (GHI) policy offers great protection and safety, and hence, you must understand how it works. It enables better choices.
In this blog, we learn how premiums are calculated in employee insurance plans and what factors affect the calculation.
Group Mediclaim Policy for Employees: Premium Calculator
A group health insurance premium calculator is an online tool utilised by insurance companies to offer an estimated cost of the policy pertaining to the group of employees being insured.
This calculator uses multiple variables of the given group while allotting an approximate yet appropriate cost for your group health coverage.
You can follow the below steps to get an estimate for your group:
- Visit the official website of a trusted insurance company, like Tata AIG, to get a quote.
- Choose the policy that you want to buy. In this case, group health insurance.
- Enter all the necessary details regarding your group’s variables. The premium calculator will ask you the number of employees to insure, contact details, average age, gender demographics, location, nature of job and more.
- The group health insurance premium calculator will ask you simple questions regarding the lifestyle habits of your employees.
- Enter your desired sum insured and coverage type.
- Hit the calculate button.
- The tool will flash the estimated cost of group health insurance.
- The calculation tool will list a number of policies that offer the kind of group health insurance policies you need to protect your employees.
Factors that Influence Group Health Insurance Premium Calculation
● Sum Insured
The sum insured of your policy refers to the maximum amount of money the policy provider will pay in the event of a claim. If your sum insured is higher, the premium amount will be higher as well. In order to align the group health insurance premium to your expectations, adjust your sum insured.
● People Covered
The number of employees that the policy will cover under the group health insurance policy significantly impacts the premium amount. When there are more people, the risk increases, benefit provisions increase and the sum insured increases as well.
This results in an increased premium amount. Similarly, fewer employees in a group results in lower premiums.
● Coverage Scope
The events and things that your sum insured covers will have a substantial impact on the policy premium. You have options like E-plan, ESC plan (Employee, spouse and children) and ESCP plan (employee, spouse, children and parents).
The type of coverage plan you choose makes a difference in the premium allotment. Naturally, a broader scope will result in a higher cost of group health insurance.
● Average Age
Average age affects your premium because people from a certain age group are more vulnerable to contracting illnesses, while others show lesser probability. If you want to calculate the average age of the group of employees in your department, you can use the given formula:
Average = Sum of all the employees’ ages ÷ number of employees
● Job’s Nature
Employees with specific types of jobs and work-related activities are more susceptible to injuries and illnesses than others. For instance, employees who work in mining fields, construction, and other high-risk professions have a high risk of getting injured or ill.
People who have longer working hours, lack mental peace and do no physical activities are also prone to distinct types of illnesses. In such cases, premium amounts are typically high.
● Claim History
The claim history of the insured group provides valuable insights into the expected future claims. Insurance companies analyse the claim history in order to estimate future risks. A group of employees with high claims in the past are more likely to be quoted higher premium amounts.
Ending Point
It is paramount to recognise the various factors at play and the function of group mediclaim policy for employee premium calculators. A GHI policy benefits your organisation and employees on a completely different level, and this requires great attention to detail from your side.
With a comprehensive understanding of premium calculation and process, you can navigate the decision-making process while choosing the right group health insurance policy for your employees.
