Group Insurance

A group insurance policy is an agreement for insurance with a company or an organization that covers
several people who have similar occupations. The organization should be set up so that new members
are continuously added, and old ones retire. The benefit is available to the entire group and no
individual members are required to sign any paperwork.

Members of a formal group, such as employees of a business or members of an organization, are

covered by group insurance. Individual insurance, in which single policies are offered to one person at a
time, and social insurance, which is sponsored by the government for example, unemployment
insurance, social security, are two types of group insurance.

Group insurance is available in a variety of types. Group life insurance is the most popular kind of life
insurance. It is frequently offered as group term insurance, which has a predetermined duration and no
monetary value. There may be group permanent life insurance available. This sort accrues cash value
and continues to be in effect until the insured person dies or the policy matures and is cashed. Group
disability income insurance covers a portion or all of an insured's lost income due to illness or accident.
Group medical expenditure insurance pays a portion or all of an insured's hospital, surgery, and other
medical expenditures.
Group accidental death and dismemberment and group travel accident insurance contain both life and h
ealth insurance.

There are some characteristics shared by all group insurance plans. The insurer only writes and sells one
contract per group, and it is with the employer or organization rather than with the individual members.
As a result, significant cost savings in marketing and administration are feasible.

DIFFERENT TYPES OF GROUPS

Employer-Employee Group
In this scheme, the employer purchases a master insurance for the benefit of its employees, and the
plan is often administered by a trust. Occasionally, the employer will purchase such group insurance to
satisfy a legal need. Employee Gratuity Benefits and Employee Deposit Linked Insurance Schemes are
two examples.

The plan may be either contributory or non-contributory, or both the employer and the employees may
make contributions. If the employees do not contribute and the corporation pays the entire cost, all
eligible employees are required to participate in the program. On the other hand, if the plan is
contributory—that is, if it is paid solely or jointly by the employer and the employees—then both an
initial high level of participation by eligible employees and ongoing mandatory participation by all new
employees are necessary.

Creditor - Debtor group

The master insurance is purchased by the creditors to pay off the remaining balance of the borrowers'
loans. Any unpaid loans in a debtor's name will be repaid with the claim amount in the case of their
death. An employer, a house loan company, a cooperative credit society, a credit card company, etc. are
examples of creditors.

Professional group
There might be group insurance policies for groups of physicians, attorneys, accountants, engineers,
journalists, pilots, and insurance agents to name a few.

Other groups
Other types of organizations, such as cooperative societies, welfare funds, members of resident
societies, bank depositors, and so on, may be eligible for group insurance.

Therefore, group insurance can be set up to satisfy a variety of needs on the part of both a group and an
individual. Benefits received through individual insurance plans and benefits provided by group
insurance are both tax deductible.

Motor Insurance
Motor insurance is insurance that covers any privately owned vehicle. Similar to other types of
insurance, motor insurance also requires a premium to be paid each month. In Bangladesh, motor
insurance terms last 1 year. Motor insurance was deemed mandatory in Bangladesh by the Bangladesh
Road Transport Authority (BRTA) and Insurance Development and Regulatory Authority (IDRA) in 2018.

Motor insurance can be divided into 3 categories:

• Private Car Insurance Policy,

• Two-wheeler Insurance Policy, &

• Commercial Vehicle Insurance.

Private Car Insurance Policy: Covers motor insurance which is taken for any privately owned car for
individuals. This insurance covers the vehicle against damages caused by fire, accidents, natural
disasters. It also includes damages for theft of the insured vehicle. This insurance also covers any
damages and/or injuries caused to a third party.

Two-wheeler Insurance Policy: Similar to the Private Car Insurance Policy but applies to privately
owned motorbikes.
Commercial Vehicle Insurance: Covers similar damages to which of Private Car Insurance Policy but it
covers damages for vehicles that are used for commercial use. Vehicles such as Trucks, buses, heavy
commercial vehicles (18-wheelers, etc.), light commercial vehicles and more .

Necessity of Motor Insurance

Automobile insurance offers protection from unforeseen incidents' unanticipated expenses. The fact
that passengers in the car are also covered by motor insurance makes it more advantageous to have
insurance than not.

Multiple insurance companies offer Motor Insurance such as, Meghna Insurance Company Limited,
Phoenix Insurance, Asia Insurance etc.

Motor Insurance coverage is determined using factors that directly affect the insurer and insured. For
each of the motor vehicle types there may be different sets of rules:

For Private Car:

1. Horsepower or cubic capacity (CC) of the vehicle.

2. Insured’s estimated value of the vehicle.

3. Seating capacity of the vehicle.

Commercial Vehicle:

1. Passenger Carrying:

Type of vehicle

Insured’s estimated value of the vehicle

Seating capacity of the vehicle.

2. Goods Carrying Vehicle:

Carrying capacity

Insured’s estimated value of the vehicle

For Motorcycle:

1. Cubic capacity of the vehicle

2. Insured’s estimated value of the vehicle

There are categories to Motor Insurance:

(1) Act Liability Policy Form (Third Party): A common policy form for all types of vehicle, i.e.,
Comprehensive Policy Form: Separate policy forms to be used for private vehicle, motorcycle &
commercial vehicles.
· Policy form shall contain two sections:

(i) SECTION 1, Own damage section. Under the Own damage section, the loss or damage to the insured
vehicle to be covered.

(ii) SECTION 2, Act liability section. Under the Act liability section, the liability of the insured, as per
motor vehicle Amendment Act, 1991 shall be covered.

(2) Act Liability Policy Form (Third Party): A common policy form for all types of vehicles i.e., private
vehicle, motorcycle & commercial vehicle to be used. Liability of the insured made compulsory by motor
vehicle Amendment Act, 1991 as well as additional liabilities may be insured.

Coverage via Comprehensive Policy:

1. By fire, explosion, self-ignition or lighting.

2. By burglary, house-breaking or theft.

3. By riot & strike including malicious and terrorist activities.

4. By earthquake (fire and shock damage).

5. By flood, typhoon, hurricane, storm, inundation, cyclone, hailstorm, frost, tempest.

6. By accidental external means.

7. Whilst in transit by road, rail, inland waterway, lift, elevator or air.

8. Act liability insurance risks.

Road accidents happen frequently in Bangladesh, resulting in damage to the car as well as the lives of
innocent passengers and onlookers. Fortunately, unless they already have one, such as life insurance,
not all of them are required to have any insurance. However, in regards of auto insurance, the party at
fault for such traffic accidents is liable for the affected parties’ damages. In recent years there has been
an urgency to mandate all private or public vehicle owners to have insurance written on their vehicles.
There are many bike owners in Bangladesh who are not only under 18 but also don't bear their own
expenses. For such individuals the ones who carry out their expenses are liable to the damages, i.e., the
parents will have to pay for the insurance if the law mandates them to.

There are multiple insurance companies in Bangladesh who provide motor insurance services. They
include Asia Insurance, Green Delta Insurance, Provati Insurance, Phoenix Insurance etc. According to
the comprehensive insurance, they are all covered for the aforementioned hazards and damages. The
quantity of premiums collected by each insurance company is the only distinction between them.
However, the quantity of contracts for auto insurance that are written is not very large. Since only car
owners frequently have motor insurance, several businesses offer "Car Insurance," which is insurance
specifically for cars. As for this insurance the other vehicles are excluded. However, it is only a niche
service.