What is Group Insurance and how does it work?

What is Group Insurance and how does it work? Thumbnail Image

Group insurance is a great way to provide cover for a group of people, where a single contract can provide cover to all members. How does group insurance work? Usually, the policy owner is an employer or an entity such as a professional body, union, association, or affinity group. Because a single policy will be covering all members, the group will be collectively assessed to ensure the common requirements are satisfied. 

What types of Group Insurance are there?

Cover provided through Group Insurance schemes will vary depending on the employer and the nature of work. Group Schemes can include Life Insurance, Total Permanent Disability (TPD) or Group Income Protection. 

What are the benefits of Group Insurance?

The biggest advantage of Group insurance is cost savings. As the cover is arranged on a ‘grouped’ basis, the cost is generally more competitive than purchasing cover on an individual basis. This is because the risk is distributed over an entire group of people, as opposed to just one person. Covering a group of people as opposed to an individual provides a broader cover with additional policy benefits and fewer exclusions. 

For an employer, Group insurance demonstrates support for their employees. This can have the desired result of employee satisfaction, loyalty, and increased morale in the workplace. Knowing that each member has access to quality insurance cover can create a more sustainable working relationship between employee and employer. In this regard, the importance of group insurance cannot be understated. 

Another attractive feature of a group insurance scheme is a simplified administration process for applications. This means time-saving with short-form application and premium payment options that can be bound in minutes.

How is Premium rated in Group Insurance policies?

As Group insurance is a single policy for all members, the characteristics of the entire group will be taken into account to determine pricing and eligibility. An insurer will take into account a range of considerations of members as a whole when assessing the premium rate, including:

  • Age
  • Gender
  • Occupation
  • Claims history and experience
  • Particular risks associated with the occupation 

Why is an Insurance Broker necessary?

Working with an insurance broker to arrange Group insurance schemes ensures you are acquiring the right amount and type of cover, at the right price. Because Group insurance assesses the characteristics of a group of people, it is important to make sure the features of the group insurance scheme address a wide range of needs and considerations. Insurance brokers can work with you to tailor a group policy that ensures you are receiving the right cover that satisfies the unique operation of your business. 

An Insurance broker can also offer continued support in administration matters. They liaise on your behalf with the insurer, ensuring communication and transparency. Insurance brokers can also aid members in the claims process and provide continued management of your Group insurance policy. You can find a more detailed breakdown of an insurance broker’s role and the benefits of working with one here.

What can Cerberos Brokers offer you?

Cerberos Brokers can offer online solutions with purpose-built platforms to save your members valuable time and discounts on premium. Our online platform enables your members to quote, bind cover, pay premiums and receive policy documents in minutes for new businesses and renewals. Software access is free, with no subscription fees, and provides your organisation the opportunity to generate long-term sponsorship income or premium savings as a membership benefit to your group.

Our current product offering includes:

Do you have any further questions about Group insurance policies? Looking to obtain a group policy quote? Or perhaps you already have an existing group policy that requires a comprehensive review? Contact us today and we can discuss possible solutions to ensure your organisation’s needs are met.

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