With the pandemic, the demand for complementary employee benefits has become popular. Health insurance, critical illness cover, and Group Accident insurance policies are commonly used for wellness benefits. Increasing medical inflation rates coupled with the responsibilities of dependents can be financially draining for employees. Additionally, the claims’ settlement process itself can be harassing. These policies can therefore be helpful. The claims settlement is also quick and hassle-free. This shows employees that organisations care and boost their morale and productivity.

The Group Personal Accident Insurance Policy, as its name implies, provides financial protection to employees who suffer injury, disability, or death during their tenure of employment. With the Government’s online Digital Health ID Card initiative, your employees can take treatments anywhere and later claim these costs. Before investing in a Group Accident insurance policy, you need to be familiar with its basic terms, calculation of premiums, and more.

The payments you make to ensure your insurance policy remains active and can utilise its benefits later are called premiums.  The employer pays the premium for group policies. But how do you calculate premiums?

This article will provide you with all the information you need to know about calculating premiums.

What Factors Influence The Premium A Of Group Personal Accident Insurance Policy?

Insurance premiums vary with age, the number of employees, the Sum Assured, the type of coverage, and the insurance history. Let’s explain these factors in detail.

  • Employee’s age
  • Age plays a critical role in determining the risk of the policy. The higher the age, the higher the risk, and thus, the higher liability of the insurance company. With age, people may require more medical care. Hence, the premium payment is also high. Under Group insurance, it is not one individual but multiple employees. Thus, Insurance companies calculate the average age of employees to calculate the premium.
  • Coverage inclusions
  • A Group Personal Accident Insurance Policy includes coverage on accidental death, hospitalisation expenses, Partial and Total disability, Transportation costs of mortal remains, Bones Safety Protection costs, child welfare fund, etc. The number of coverage affects the premium amount. The more coverage an insurance company offers in its plan, the higher it will charge for the premiums. Also, the premium amount increases if it includes the insured dependents.
  • Sum Assured
  • A sum assured is the amount payable to the insured or family of the insured if the insured event occurs. Under the Group Accident policy, the maximum monetary limit will cover the employee’s medical expenses. When purchasing the Group insurance policy, this amount is decided between the employer and the insurance company. The premium amount will also be higher.
  • Riders
  • Riders are an additional coverage the insured takes to protect against life uncertainties. These can be education cover for the children or family health insurance. Purchasing riders is more affordable than buying separate family health insurance. At Plum Insurance, you have the option to add riders like Health insurance and Term Insurance to your accident insurance. However, you need to pay extra for additional coverage. All of this affects the premium amount. The higher the cover, the higher the premium amount.
  • History of company
  • Every insurance company reviews a client’s history before approving their insurance policies. Now, under Group insurance, All employees are eligible to avail the benefits. There are no prior medical checkups for employees. Also, the employer pays the premium. Hence, an insurance company reviews the organisation’s reputation and history of claims. Suppose the organisation’s reputation is not favourable, or they are not consistent with premium payments. In that case, the insurance company will charge them higher premiums. Also, the insurance companies review the premium amount every year. Suppose the company’s frequency and several claims have been high in the previous year. In that case, the insurance company may increase the premium amount.

Steps To Calculate The Group Accident Insurance Premium

You can use an online calculator to estimate the payable premium. Following are the steps you must follow.

Step 1: Make a list of all your employees, their date of birth, and the date of joining.

Step 2: Calculate the number and average age of employees in your organisation. If the policy includes the dependents, calculate the number.

Step 3: Decide the coverage you want. If the plan offers the option of riders, choose the ones you want.

Step 4: Choose the sum assured.

Step 5: Enter the details and calculate the premium.

Step 6: At Plum Insurance, you can use their instant premium calculator for an estimate. You only need to type in your name, work email, company name and team size and click submit. The company representative will get back to you with the quote on your work email and any other information you may need.

Final Thoughts

The above article explains how to calculate the premium under the Group Personal Accident Insurance Policy. You need to be consistent with your premium payments. Otherwise, it will affect your premium renewal amount in the future. It may even lead to the rejection of the policies. With our Plum Dashboard, you can access all insurance information in one place. You can even add, delete employees, and activate the policy benefits conveniently. Their premium calculation is on a pro rata basis. Further, the company offers 24/7 customer support to solve any of your queries and doubts.

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