How to Select the Right Sum Insured for Your Group Plan

Employees often look for the best-paid job offers and packages, increments, work environment, etc. However, they tend to pay less attention to the most vital aspect of their life, i.e., health. We must always look for the best health insurance policy that will meet the requirements for our future health and well-being. A group medical cover is one of the most beneficial health policies. As an employer, it will be viable to choose the best group health insurance policy for your employees.

What Is a Group Health Cover? 💡

A group health cover or group health insurance policy is a health insurance plan that covers the entire team or a group who works in the organisation. It is also referred to as an employee insurance plan. This type of health cover has huge benefits over individual health insurance policies.

But, how do you choose the best health cover plan for your group with the right sum insured?

Ever since the Covid-19 pandemic has struck the world, health concerns have become a serious matter of concern. People suddenly encounter unforeseen situations and medical emergencies that have ruined them due to inadequate health insurance. The group health cover is much better than the individual health insurance. However, the real challenge lies in opting for the best group health cover.

Four important aspects will be detrimental in choosing the best group health ✔ cover for your team. They are:

  • Members covered: The group health cover not only covers the medical expenses for the employees but also for the employees’ families and the close members dependent on them. There are different plans such as the E plans, ESC plans, and ESCP plans.
  • Sum insured: It is the maximum value that the company will have to pay.
  • Maternity benefits: Maternity benefits are also included in the group health cover that can be opted for by the employees if they want. The employee’s premium will increase to 15% to 20% if the maternity benefits have been opted for.
  • Pre-existing disease coverage: If there are any ailments or diseases which the members of the group are suffering from, the group health cover will cover their expenses even though they suffer from the disease before joining the company. 💯

It is very important to pick the right sum insured for your group. A sum insured is the maximum limit up to which the company will pay for the medical expenses covered in the policy. Members in the group must be provided with a sufficient insured sum. If any of the members face a medical emergency and the medical group cover does not cover the expenses, it will burden the employees. In order to choose the right sum insured, there are various factors that must be looked into. 💭

They are :

  • Age of the beneficiary
  • Health conditions of the beneficiary
  • Income
  • General Lifestyle

Let us try to understand the sum insured through an example: 🔍

Vishal has been diagnosed with dengue, and he has to undergo treatment. His father’s company had covered a group health insurance for his father. The group insurance includes insurance for the entire family and himself. The hospital bill was up to 5 Lakhs, and the cost of treatment was 60,000. However, the hospital bill was cleared under the group health insurance cover. After a few days, Vishal’s brother suffered a serious injury due to an accident, where he had suffered multiple fractures. This had cost more, and the hospital bill was up to Rs 4.5 Lakhs. Vishal’s father had to spend from his own pocket due to this. However, he had to pay only Rs. 60,000, whereas the rest of the bill was covered in the group health cover. If Vishal’s father had not opted for the group health cover, which had insurance for his family members too, he would have had to pay Rs 5.1 Lakh all by himself. 💰

Every individual will have different health conditions, lifestyle, age, etc. So, the sum insured under the group plan must be selected such that every member of the group can access the group health cover as per their needs. The premium value will increase with the price of the sum insured. Therefore, it is advisable to look into the aspects of the kind of hospitals your employees might visit and the family coverage provided to them. If they generally prefer to go to the tier-A hospitals, then their sum insured will range at least  Rs 3-5 lakhs, and if they have health issues, then they might have to visit the hospital frequently. 🖊

So, you should choose the right sum insured, depending on their health conditions too. If they are suffering from diseases, then you should choose higher SI with an extra premium. You should also consider the lifestyle. If the group consists of more unmarried young employees or do not have any dependent members, then their SI can be chosen at a nominal rate. Another important factor is the age of the group members. If the group members are aged, then the organisation should choose the SI depending on their health conditions. This is generally not the case. However, if they are married or their family members are highly dependent on the group members, then the medical group cover must be high, as much as Rs 5 lakhs or even more.🔝


The primary goal of the sum insured is to pay for the damages incurred as compensation. Picking the right sum insured under your group medical cover plays a very important role, as the group health cover policy generally extends up to 25 years and cannot be changed once they are signed. 📃

Paul Petersen

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