Background of Group Benefits
- A "group benefit plan," as defined here, is any type of plan sponsered or initiated unlaterally or jointly by employers or employees and providing benefits that stem from the employment relationship and that are not underwritten or paid directly by government (federal, state, or local). In general, the intent is to include plans that provide in an orderly predetermined fashion for (1) income maintenance during periods when regular earnings are cut off because of death, accident, sickness, retirement, or unemployment and (2) benefits to meet medical expenses associated with illness or injury.
Group insurance is a method of providing insurance coverage for a group of people under one contract. The majority of Group Insurance policies are issued to business to cover the lives of employees.
Comparison of Rate of Premium between and Individual and Group Insurance.
Rate of premium charged may be comparatively less than individual insurance. This is due to savings in the costs of obtaining business and servicing teh policy. The premium may be contributed solely by the employer (more common) or solely by the employee himself; jointly by both the employer and employee.
Other types of Group Insurance
- Insurance on a group basis can be offered to other types of non-employee groups, eg: a football club, a trade union, an association of doctors etc. It should of course be a formal group in itself and not one formed for the purpose of insuracne alone.
- May also be issued other than on Term Insurance basis.. These can be Endownment Covers or Group Pension Schemes, in the form of Deferred Annuity or Group Sickness and Hospitilization Benefits. The latter often forms part of the employee benefits programme in Singapore.