How Do I Choose the Best Group Insurance?

Group insurance refers to insurance that provides insurance for many insured persons with one insurance policy. Group insurance uses collective units as the object of insurance, with insurance companies and collective units as the parties, and concludes a contract in the form of an insurance policy. It is usually a group unit as the insured and the staff in the unit as the insured. Group insurance is characterized by: exemption from physical examination due to small unhealthy adverse selection factors; simplification of procedures because one policy serves many people; simplification of procedures, small adverse selection factors and low insurance costs However, in order to prevent adverse selection, specific business practices generally have the following provisions: (1) Restrictions on groups. The insured unit must be a legal person organization, and the insured must be a member of the unit organization. (2) 75% of the people in the group must take out insurance. (3) In a group, the amount of insurance, or the same amount of insurance, is determined separately according to length of service, salary income, and job level. Group insurance mostly takes one year as the term and renews the insurance policy every year. The insurance premium can be borne by the unit or jointly by the unit and the individual. The insurance premium rate has different standards according to different occupations. ^[1]

Group insurance

The appearance of group insurance can be traced back to the 19th century. At that time, slave trade was popular. In order to ensure the safety of slaves transported in the United States and the labor of China to Panama, group insurance policies appeared to specifically cover slaves and labor. However, since slaves and coolies were only a kind of property in law at the time, these insurance policies did not belong to personal insurance and therefore did not fall into the category of group insurance.

In the late 19th century, there were several accidental injury policies with the characteristics of modern group insurance, but the insurance costs were completely borne by employees, so they were not group policies in a practical sense. Of course, some scholars believe that the protection of firefighters provided by the Travelers Insurance Company in 1890 was the first group health insurance contract in the United States.

It is also worth mentioning that in 1905, a group life insurance policy signed by the Fair Life Insurance Company of the United States and United Tobacco Company. Fair Life Insurance issued a master policy to United Tobacco, and each insured received a certificate of insurance, which has the characteristics of modern group insurance. However, because this insurance policy was submitted by the insured individual to apply for insurance rather than voluntary coverage by the employer, and the insured must undergo a medical examination, this insurance policy is still a simple collective form of personal insurance, which cannot be considered Real group insurance.

In 1907, Professor Heller Sieg of Columbia University in the United States clearly put forward the idea of group insurance: employers should bring to their employees employees accidents, illness, disability caused by old age, incapacity, death, etc. The best way to take responsibility for social issues is to pay insurance premiums for employers to buy insurance for employees.

In June 1911, the Fair Life Insurance Company of the United States and Bandasuo Leather Company signed the world's first truly group life insurance policy, thus marking the emergence of group life insurance. ^[3]

There are several factors to be aware of when purchasing group insurance. First of all, we should consider combining short-term and long-term incentives with equal emphasis on guarantee and service. At the same time, we should increase or adjust the sum insured to improve the competitiveness of enterprises. Pay attention to the following points when purchasing group insurance:
The first is to protect the insured's right to know.
The second is that the enterprise should reasonably choose an insurance plan according to its own situation and carefully read the insurance terms to ensure the effective implementation of the contract.
Third, it is recommended to examine the solvency and creditworthiness of the insured company to ensure the full use of insurance effectiveness.
Fourth, for companies with high risk factors and large liquidity, it is recommended to seriously consider the importance of purchasing commercial insurance to ensure the diversification of risks.

In China, the development of group insurance has gone through the following three stages:

The first stage, the development stage of group insurance leading market (recovery of insurance business to 1991)

In the 1980s when the insurance business was resumed, China's group insurance accounted for 80% of the entire market, and its business model was mainly through the form of government documents and the participation and promotion of administrative forces. At that time, simple life insurance and other activities carried out by the People's Insurance Company of China adopted this method.

What's more, the individual insurance at that time was also referred to the group insurance. The company was responsible for withholding and paying premiums, such as student safety insurance.

Because the mass sales method reduced marketing costs and management costs, and the administrative intervention under certain conditions, the group insurance rate was generally low, and group insurance became one of the most important marketing methods in the life insurance market at that time.

The second stage, the decline of group insurance (1992-2001)

After years of hard work, foreign insurance companies began to enter the insurance market in China in 1992. The first city to be opened was Shanghai, a pilot city. The scope of business of foreign insurance institutions in Article 17 of the "Interim Measures for the Administration of Foreign Insurance Institutions in Shanghai" was limited to: : "According to the application, the People's Bank of China has approved foreign insurance institutions to operate part or all of the following businesses except statutory insurance, personal insurance business paid by foreigners and domestic individuals; reinsurance business of the above business;" and other approved business. Group insurance business is clearly defined as an area that foreign investment should not enter.

After foreign-funded insurance institutions entered the Shanghai market, the marketing model of individual insurance agents began to prevail. It seems that operating insurance is on an equal footing with insurance marketing. Objectively speaking, the personal agency system promoted the prosperity of personal insurance. Chinese-funded life insurance companies followed suit and expanded the marketing system nationwide; however, it also brought a sharp decline in the group insurance market and the group insurance ratio dropped to 20%. .

Due to the lack of regulatory rules and management practices for group insurance, in addition to group accidents, group health, and group regular group insurance that are group insurance, group insurance is also regarded as group insurance in China. Group annuities (previously collectively referred to as supplementary endowment insurance) that do not enjoy the tax system arrangement are also regarded as group insurance. This has led to the ambiguity and ambiguity of the group insurance definition. As long-term and short-term business are not divided, it is difficult to have a set of rules to Defining such a large range makes it more difficult to introduce rules.

Several market phenomena emerged during this period. First, in order to break the restriction that they can only operate personal life insurance, foreign insurance companies have begun to play sideball. Workplace sales have existed abroad for a long time. Because the unit does not pay, it is only deducted from the pay account of the individual insurer. It is a withholding remittance. At this time, foreign capital introduced this method in Shanghai and carried it forward. It began to disguise itself. In the age of group insurance, although this kind of behavior was later stopped by the regulatory authorities, it never completely disappeared. Therefore, in order to adapt to the differences in the scope of Chinese and foreign business, a long-running debate on the concept of group insurance has begun. There is no authoritative definition of a scientific and fair group insurance. Second, the position of group insurance in the industry has declined sharply. Due to the unscientific group management concepts and weak self-management capabilities among companies, vicious competition in grass-roots businesses has resulted, and supervision has not established a bottom line, so the group insurance market has become unfavorable. The market once became a burden for Chinese companies to move forward, and it was a pity that the food was tasteless. Some companies have started hemostasis projects, and their business scale and manpower have been drastically reduced. Some companies have started the process of chasing scale or even money laundering in the name of group insurance, and there have been incredible phenomena such as zero management costs. Subsequently, the regulatory authorities suspended the group's life insurance products.

The third stage is the stage of group insurance seeking new students (after 2002)

The use of 2002 as a watershed for group insurance transition is due to several major events during this period: First, China officially joined the World Trade Organization on December 11, 2001. In accordance with the principle of gradual opening up, the Chinese government provides insurance for the Chinese insurance industry. A three-year protection period has been established, and it will be fully open to the end of 2004, which is reflected in the opening of group insurance, mainly in the area of life insurance. The second is the second amendment to the Insurance Law, the third of the Standing Committee of the Ninth People's Congress on October 28, 2002. The tenth meeting of the "Decision on Amending the" Insurance Law of the People's Republic of China "" was officially promulgated, and the revised scope of business of insurance companies was redefined in Article 92, that is, the same insurer must not concurrently carry out property insurance business and personal insurance. Insurance business; however, insurance companies operating property insurance business may conduct short-term health insurance business and accidental injury insurance business upon approval by the insurance regulatory authority. This has doubled competitors in this business area.

In the following two years, there were a series of huge shocks in policies. The first was the introduction of the enterprise annuity policy in 2004. The Trial Measures for the Management of Enterprise Annuity Funds was first issued by the three committees (ie the Ministry of Labor and Social Security, the China Banking Regulatory Commission, the Securities Regulatory Commission and the Insurance Regulatory Commission). Becoming mainstream, although this does not conform to international practice, it does have a huge impact on the current commercial supplementary pension insurance. The long-term business of insurance group insurance is shrinking sharply, and most customers with potential demand for commercial group insurance are holding coins for purchase. Second, the government has issued policies to restrict non-standard insurance behavior. In 2005, the Central Commission for Discipline Inspection and the Ministry of Supervision issued the "Decisions on Party and Government Organs and Institutions Using Public Funds to Purchase Commercial Insurance for Individuals", which began to restrict the behavior of public fund consumer insurance. Third, the drafting of the anti-money laundering law. On October 31, 2006, the Twenty-fourth Meeting of the Standing Committee of the Tenth National People's Congress passed the Anti-Money Laundering Law, which was implemented on January 1, 2007. The People's Bank of China issued the Financial Institution "Laundering Regulations" and "Administrative Measures on Financial Institutions' Reporting of Large Amount Transactions and Suspicious Transactions", and "Anti-Money Laundering Regulations for Insurance Financial Institutions" will be promulgated.