What is group insurance?
Group insurance is a contract that provides you with coverage for certain risks related to your life, health, employment, or credit.
This contract is entered into between an insurer and a person representing a group of individuals sharing a common link, for example an employer, a trade union, an association, or a bank. You are part of this group if you join the contract.
How do you join group insurance?
There are two ways to join group insurance: compulsory or voluntary.
- Compulsory membership : You are automatically insured as soon as you become part of the group, without having to give your consent. For example, your employer may require you to take out health insurance or life insurance.
- Voluntary membership : You must express your willingness to be insured and accept the terms of the contract. For example, if you choose borrower’s insurance for your mortgage loan.
Before joining, you must be informed of the cover provided by the contract and receive advice suited to your personal situation. This is a legal obligation for both the insurer and the policyholder (Cass., ass. plen., 2 March 2007 for borrower’s insurance).
What are the advantages of group insurance?
Group insurance offers several advantages. The contracts often benefit from reduced premiums thanks to the pooling of risks among group members.
In addition, members are generally accepted without having to complete a detailed medical questionnaire, which is particularly advantageous for persons with health risks.
Finally, the enrolment and contract management procedures are simplified, as they are centralised by the policyholder (employer, trade union, bank, etc.).
What are the disadvantages of group insurance?
Group insurance also has disadvantages. The cover offered is often standardised and may not correspond exactly to the individual needs of each member.
The management of the contract and important decisions are in the hands of the policyholder, which can limit your control over the insurance.
In the event of a change in circumstances (job loss, change of bank, etc.), you may lose the benefits of the group insurance and have to find new cover.
Who pays the premiums?
The premiums are the amounts you must pay to be insured. They are calculated based on the risk you represent and the cover you require. They are paid to the insurer by the policyholder, who may ask you to contribute to the payment.
If you fail to pay your premiums, the policyholder may exclude you from the contract after sending you a formal notice by recorded delivery (C. assur., art. L. 141-3). You are no longer insured from 40 days after the sending of this letter (Civ. 2e, 8 Sept. 2005).
Can the contract be changed?
The contract may be amended by the insurer or the policyholder, but you must be informed in writing at least three months before the changes take effect. You must accept these changes, unless you are able to cancel your membership. You may only cancel if your membership is voluntary, not if it is compulsory. You must then take out another contract to remain insured (C. assur., art. L. 141-4).
For borrower’s insurance, Law No. 2022-270 of 28 February 2022 allows you to cancel your contract at any time, even if your membership is compulsory. This enables you to change your insurance and benefit from better terms. You must be regularly informed of this option by your insurer or your policyholder.
What should you do in case of a dispute?
In the event of a problem, start by discussing it with the policyholder (employer, trade union, bank, etc.) to try to find an amicable solution. If dialogue is not sufficient, you may seek the assistance of an insurance mediator to attempt to resolve the dispute amicably.
If no solution is found, it may be necessary to engage a lawyer specialising in insurance law to defend your rights. As a last resort, you may bring legal proceedings against the insurer or the policyholder to obtain compensation.
What are the possible causes for the termination of a group insurance contract?
The group insurance contract may come to an end for several reasons, including:
- Non-payment of premiums: If you fail to pay your premiums, you may be excluded from the contract after receiving a formal notice.
- Cancellation by the insurer or the policyholder: The contract may be cancelled by the insurer or the policyholder under certain conditions and after informing you in writing.
- Change of circumstances: If you leave the group to which you belong (change of job, change of bank, etc.), you may lose the cover of the group insurance.
How do you report a claim to your insurer and obtain compensation?
In the event of a claim, that is, when the insured event occurs (illness, death, disability, etc.), you must contact the insurer to make a claim notification. The insurer is responsible for claims management and must process your compensation request promptly and fairly. You will need to provide the necessary documents to prove the claim and justify your request.
The insurer may also request additional information or medical examinations to assess the extent of the claim and determine the amount of compensation. Once all the information has been gathered, the insurer will compensate you in accordance with the terms of the contract.
What are the insurer’s obligations?
The insurer has several obligations. It must clearly inform you about the cover and conditions of the contract and provide you with advice suited to your personal situation. It is responsible for claims management and must process your compensation requests promptly and fairly.
Finally, the insurer must comply with applicable laws and regulations, particularly regarding prior information and compliance with time limits.
What are the policyholder’s obligations?
The policyholder must also fulfil certain obligations. The policyholder must inform you of the contract terms and any amendments in a transparent manner. The policyholder is responsible for collecting and paying premiums to the insurer.
The policyholder must also keep you informed of any amendments to the contract and the options for cancellation or change of insurance.
