With the pandemic, there has been a drastic shift in the employee’s priorities. In 2021 itself, around 4 million employees quit their jobs. The primary reasons were dissatisfaction, poor work-life balance and lack of opportunities. The decision to quit jobs doesn’t happen overnight, rather it builds over time. Even employees with salary hikes may feel dissatisfied. Thus, organizations must communicate with their employees and analyze what they need. With the pandemic, the focus has shifted to covering medical costs and consequently to the need for insurance. Health insurance has been made mandatory by the Government of India for all organizations resuming operations post the lockdown. Other than that, organizations can also opt for a group personal accident insurance policy. In this article, we will not only explain each of them in detail but also outline the differences between them.
Differences Between Group Personal Accident Insurance Policy, Group Medical Coverage (GMC), and Group Term Life Insurance (GTL)
Group personal accident insurance policy, group health insurance policy, and group term life insurance policy all offer financial support to the employees or their nominees in case of unfortunate events. In addition, each policy allows tax benefits to employers under the Income Tax Act. However, their terms and conditions vary. Here is the list of differences between all.
| S. no. | Particulars | GPA | GMC | GTL |
| 1 | Why should you take this policy? | You should take this policy if you wish to cover your employees financially against injuries or death due to accidents. | You should take this policy if you wish to provide full medical cover, including pre and post-hospitalization expenses, to employees and their dependents. | You should take this policy if you wish to offer financial support to the nominees in case something unfortunate happens to your employees. |
| 2 | When can you avail the benefits of the policy? | This policy only caters to claims occurring due to accidents. In addition, you can make one claim per policy.
The individual insured under this policy should be an active employee of your organization. |
This policy caters to all claims related to pre and post-hospitalization expenses.
The individual insured under this policy should be an active employee of your organization. |
This policy caters to all death claims due to accident or otherwise.
The individual insured under this policy should be an active employee of your organization. |
| 3 | What is the scope of coverage? | Since it only caters to accident claims, the insurance coverage is comparatively lower than in other policies. | It has wide insurance coverage.
It covers pre-existing diseases, pre and post-hospitalization expenses, maternity care, other medical expenses, etc. It can even include accident injuries. |
This policy offers death benefits due to accidents or natural reasons. However, it does not include reimbursement of medical expenses. Hence, its coverage is higher than GPA but lower than GMC. |
| 4 | Is it available for dependents? | No, this policy covers only the insured. | Yes, this policy covers both the employees and their dependents. | This policy offers a sum assured to dependents if the insured dies during the policy term. Therefore, it is not for dependents. |
| 5 | Can the policies be customized? | No, the policy cannot be customized. Accident insurance is specifically-related to injuries and disabilities arising due to accidents. In addition, it includes ambulance charges, transportation of mortal remains, and an education fund for the insured’s children. | Yes, it can be customized.
Since it includes various treatments and procedures, the organization can customize it in accordance with their employees’ needs. |
No, it cannot be customized.
This policy specifically caters to the death benefit. Therefore, there is no question of inclusions and exclusions. |
| 6 | Are the policy benefits available outside the country also? | Yes, the insured or the nominees can avail themselves of the benefits of the policy worldwide. | No, the benefits of the policy are not available everywhere.
Even in India, the insured can avail of certain facilities like cashless only with a network of hospitals affiliated to the insurance company. |
Yes, the policy allows death benefits to the nominees, even if the insured dies outside India. However, the event must occur during the policy term. |
| 7 | What are the general exclusions of the policy? | The following treatments or diseases are not covered under the policy:
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Health insurance does not cover the following cases:
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Term insurance excludes the following cases:
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| 8 | Is it required by law? | No, personal accident insurance is a voluntary benefit offered by employers. | Yes, post the lockdown, the government made it mandatory for companies resuming work to have a health policy in place as a standard operations procedure. | Term insurance schemes covered under the Employee Provident Fund of India are mandatory. |
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Which organizations must employ this policy? |
This policy offers financial support against accidental risks. Therefore, it best suits organizations whose nature of business is hazardous or life-threatening. |
As per the government, all organizations must have this policy for their employees. |
All organizations can offer this policy. However, due to the limited coverage, employees will have to purchase riders at additional costs. |
| 10 | Is the amount of premium low or high under this policy? | The premium amount is comparatively lower. | Since the coverage is high, the premium amount is a little higher. | It is one of the most cost-effective insurance policies. |
Conclusion
After reading the above article, you will have a fair understanding of the differences between group personal accident insurance policy, group medical insurance policy, and group term insurance policy. Insurance coverage varies in accordance with each organization. Therefore, review your financials, analyze your employee’s needs and invest accordingly. Also, before choosing an insurance company, research their claims settlements process and read the fine print carefully. At Plum Insurance, you get a transparent overview of your policies with straightforward and digitised claim settlements.