Understand Premium Rates, Experience and Pooled Basis of Group Insurance

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Many corporations will offer competitive packages, and that’s even a strategy in hiring and retaining employees. These competitive packages include group insurance to plans that provide individual retirement accounts or traditional registered pension plans, etc. In this article, we will discuss premium rates, experience basic and pooled basis of group insurance.

1. Premium rates
Premium rate of group insurance are set by insurance companies based on the number of employees enrollment, age, sex and amount of insurance. The premium is charged at a monthly rate per thousand of coverage. All members in the group therefore will pay the same premium per month regardless of age or sex.
Premiums are generally adjusted each year according to experience. If the policy is participating, the adjustment may be in the form of a dividend and in a non-participating policy, will take the form of an increase or decrease in rate, depending on
a) Claim experience
b) Occupations
c) Gender

2. Experience basic
Experience basic means that at any anniversary of the plan, the past year claim are compare to the amount of premium charged. If claims were higher than 74%, the premiums would be increased so as to guarantee next years percentage. At the same time, anticipated increased costs from health care providers and inflation also are factored into the renewal premium.

3. Pooled basic
Premiums and claims are accounted on a pooled basis and the rates rise (or fall) based on the claims versus the premiums paid. It is not unusual for larger groups to have the life insurance, AD & D and LTD benefits also pooled. This helps to protect the group next year premium against any large claim in the current year.

I hope this information will help. If you need more information, you can read the complete series of the above subject at my home page:

http://lifeanddisabitityinsuranceunderwriter.blogspot.com/
http://groupinsurance03.blogspot.com/
http://groupinsurance01.blogspot.com/