Why Group Health Plans are Important?

Nutan Gupta

28 Jun 2017

New Page 1

The main purpose of a group medical cover is to meet the unpredictable medical needs of each group member. This plan also covers pre-existing diseases along with the diagnosis costs. In some cases, it covers the maternity expenses, visionary treatment, and dental check-ups too. This may function in the form of cashless card form or the reimbursement of medical expense up to the limit specified.

How does it work?

The group insurance cover is the single contract taken by a group administrator in most cases a company. The contract provides coverage to multiple beneficiaries of the group members, i.e. the employees of the company. The administrator is responsible for the payment of premium in respect of a group policy.

In case of any incident (which is covered under the contract) with a member of the group, the member is free to file the claim with the insurer directly or can request for a reimbursement/compensation through the employer.

The members are covered under the insurance contract as long as they are a part of the group. If at any point any member leaves the group, the insurance contract stops covering that person.

Here is why every business should consider buying a group life insurance for its employees:

Financial Protection to Employee’s Dependents: The group life insurance plan offers financial protection to the family of the employee and helps them to be stress-free about their dependents financial future.

Increased Productivity: A stress-free environment helps nurture creativity and employees may not hesitate to go the extra mile to achieve the employment objectives.

Attract and Retain the Talent: The group plan makes the employee feel that they are the valued part of the organization. Life insurance is also considered one of the hygiene factors for best employers. It helps the company to attract more talented people.

More Financially Attractive: If there is no group plan offered by the company, then the employees need to subscribe to a life insurance policy themselves to protect their life for which the employee need to pay more (approximately 30% more than the group premium) out of the pocket. This reduces the savings in the hands of the employees whereas in case of group plan the employee gets more in hand compensation.

Tax Benefits: The amount contributed by the business towards the group life plan is considered as the business expense and not included in the profit.

Summing Up

Employees are an integral part of any organization. Nowadays more and more companies are becoming employee-centric and corporate health insurance is a good way to lure and hold on to valuable talent. Moreover, by offering coverage to the employees, the employers get tax deductions under the Income Tax Act. This makes the group insurance policy is a win-win situation for both the employer and employees.

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mutual-fund

Why to Choose Mutual Funds Instead of Directly Investing Into Equities?

Whether to invest in equities or mutual funds is a question that has plagued every investor. As someone who needs the best value for his/her investment should you invest in equity directly or via mutual funds?

Let’s start by first understanding what these two terms ‘equities’ and ‘mutual funds’ stand for-

Equities- Equities generally represent ownership of a company. If you own any equity in a company, you are a part owner of the said company (depending on how much equity you own).

Mutual Funds – It is an investment scheme which is professionally managed by an asset management company. It pools together the resources of a group of people and invests their money in equities, debentures, bonds and other securities.

Why choose mutual funds over equities?

For people who’ve never invested in either stocks or mutual funds, it is hard to know which is better and where to start. Broadly speaking, if you are a novice investor, mutual funds are not only less risky but also way easier to manage. Here are some ways in which investing in mutual funds is beneficial as opposed to investing in equities -

Diversification

Mutual funds provide more diversification as compared to an individual equity stock. When you invest in equity, you are investing in a single company which has its inherent risk. For example, if you invest Rs.20,000 in buying equities of one company, you could face a total loss if that particular company performs poorly in the market.  

If you invest the same amount in mutual funds, it will be invested in different kinds of stocks and financial instruments, high-risk and low-risk both, so you might not face total loss even if one company does poorly.

Scale of Investment and Lower Costs

For an individual investor buying and selling stocks is a difficult task due to its high price. Thus, any gains made from stock appreciation are nullified if the overall trading costs are considered. Comparatively with mutual funds, as the money is pooled from a large number of investors, the cost per individual is lowered.  

Another advantage of mutual funds is that you don’t need to invest large sums of money. Buying equities for a profitable venture needs huge amounts of money, a minimum of few lakhs. With mutual funds, you can start with Rs.1000 and earn profits on that as well.

Convenience

Keeping an eye on the markets everyday is a time-consuming business, especially if you are investing as a side gig. There are people who spend their lives studying the market and still end up sustaining heavy losses. Though investing in mutual funds does not guarantee high returns, it is stress-free and needs less work as compared to investing in equities.

To sum it up

It is important to remember that mutual funds have their own disadvantages as well. Thus, as with any financial decision, educating yourself and understanding the suitability of all the available options is the ideal way to invest. 


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Why Group Health Plans are Important?

Nutan Gupta

28 Jun 2017

New Page 1

The main purpose of a group medical cover is to meet the unpredictable medical needs of each group member. This plan also covers pre-existing diseases along with the diagnosis costs. In some cases, it covers the maternity expenses, visionary treatment, and dental check-ups too. This may function in the form of cashless card form or the reimbursement of medical expense up to the limit specified.

How does it work?

The group insurance cover is the single contract taken by a group administrator in most cases a company. The contract provides coverage to multiple beneficiaries of the group members, i.e. the employees of the company. The administrator is responsible for the payment of premium in respect of a group policy.

In case of any incident (which is covered under the contract) with a member of the group, the member is free to file the claim with the insurer directly or can request for a reimbursement/compensation through the employer.

The members are covered under the insurance contract as long as they are a part of the group. If at any point any member leaves the group, the insurance contract stops covering that person.

Here is why every business should consider buying a group life insurance for its employees:

Financial Protection to Employee’s Dependents: The group life insurance plan offers financial protection to the family of the employee and helps them to be stress-free about their dependents financial future.

Increased Productivity: A stress-free environment helps nurture creativity and employees may not hesitate to go the extra mile to achieve the employment objectives.

Attract and Retain the Talent: The group plan makes the employee feel that they are the valued part of the organization. Life insurance is also considered one of the hygiene factors for best employers. It helps the company to attract more talented people.

More Financially Attractive: If there is no group plan offered by the company, then the employees need to subscribe to a life insurance policy themselves to protect their life for which the employee need to pay more (approximately 30% more than the group premium) out of the pocket. This reduces the savings in the hands of the employees whereas in case of group plan the employee gets more in hand compensation.

Tax Benefits: The amount contributed by the business towards the group life plan is considered as the business expense and not included in the profit.

Summing Up

Employees are an integral part of any organization. Nowadays more and more companies are becoming employee-centric and corporate health insurance is a good way to lure and hold on to valuable talent. Moreover, by offering coverage to the employees, the employers get tax deductions under the Income Tax Act. This makes the group insurance policy is a win-win situation for both the employer and employees.