The business of covering a large number of people through a
single policy is known as group insurance. Two basic criteria for coverage
under group insurance are (i) the group shall be formed for some purpose other
than getting insurance cover, and (ii) the group shall be homogeneous in its
membership. This means that the risk exposure of members of the group shall be
similar.
The group must have a legal entity. For example, it shall be
a society registered under the Societies Registration Act, 1860 or a company
registered under the Companies Act, 1956 or a Trade Union registered under the Trade
Union Act, 1926 etc. Registration provides the status of ‘legal person’ making it eligible to enter into a contract, to own property, to sue and be sued.
There are several types of group insurance schemes like the
OYRGTA (One Year Renewable Group Term Assurance), Group Gratuity Assurance,
Group Superannuation Assurance, Group Savings Linked Insurance etc.
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