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  • > Quick Guide to Group Term Life Insurance
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The Benefits of Group Term Life Insurance

Comprehensive Cover

Group term life insurance covers death benefit and also provides options to cover additional riders such as permanent disability (total and partial) and critical illness at an additional premium.

Graded Sum Insured

Options to cover multiple sum insureds under our group term insurance plan. Coverages can vary by grade, designation, number of employees, gender, profile of work, industry, salary and retirement age.

Increase in Sum Assured

Option to increase the sum insured under group term policy during the year due to salary hike, promotions or other reasonable reasons, without changing the definition for the cover for the group.


Fast Claim Settlement

Easy and prompt claim settlement within specified turn around times. All aspects related to claims such as faster communication, timely submission of claim documents to insurers are handled by experts centrally.

Quick Guide to Group Term Life Insurance

Group Term Life Insurance

Group term life insurance is a type of life insurance policy that provides coverage for a group of people, usually employees of a company. The policy is purchased by the employer and covers all eligible employees, with the premium paid by the employer. Group term life insurance is usually less expensive than individual policies, making it an attractive option for employers looking to provide life insurance benefits to their employees. The coverage usually ends when the employee leaves the company or retires. Group term life insurance offers a convenient way for employers to provide a valuable benefit to their employees and can help provide financial security for employees’ families in the event of their death.

What Is Group Term Life Insurance Plan?

Group term life insurance is a type of life insurance policy that provides coverage to a group of individuals, typically employees of a company or members of a fraternal organization. A group term life insurance plan is a single policy that covers all members of the group for a specified period, usually one year. The policy offers a death benefit payout to the beneficiary of a member who passes away during the policy term (while employee is in service).


The premium for the group term life insurance plan is either paid by the employer or shared between the employer and the employee, depending on the terms of the policy. The coverage amount for each member of the group is usually based on their salary, flat or graded coverage for all members. Group term life insurance plans are affordable compared to individual life insurance policies due to the shared risk among members.


Additionally, group term life insurance plans offer a range of benefits to both employers and employees, including tax benefits, customizable coverage, and no requirement for medical check-ups of majority of employees. Overall, group term life insurance plans provide a practical and cost-effective solution for providing life insurance coverage to a large group of people.

How Group Term Life Insurance Works

Group term life insurance is a type of life insurance policy that provides coverage to a group of people, usually employees of a company or members of an organization. In a group term insurance plan, a single policy covers all members of the group, and the premium is usually paid by the employer or the organization. The policy provides a lump-sum payment to the beneficiary in case of the death of a member of the group during the term of the policy.


Group term insurance policies typically have a one-year term, after which they must be renewed. The premium for the policy is calculated based on the size of the group, the age distribution of the members, and the amount of coverage provided to each member, etc. Group term insurance policies are usually less expensive than individual policies, as the insurance provider is able to combine the costs of management, maintenance, and renewal into a single policy.


One of the benefits of a group term insurance policy is that it provides coverage to all members of the group, regardless of their age, occupation, or health status. However, coverage ends when a member leaves the group, and the policy is not portable to an individual policy.

Advantages of Group Term Life Insurance

Group term life insurance provides several advantages to both employers and employees. Firstly, it provides basic life insurance coverage to all members of a group, regardless of their age, occupation, or social context. This means that all members of the group are automatically covered by the policy.


Another significant benefit of group term life insurance is that it is more affordable than individual insurance plans. The insurance provider can combine different costs, including management, maintenance, and renewal, into a single master policy. The premium for the policy is paid by the employer, and in some cases, the employee may be responsible for paying a portion of the premium.


This can help to reduce the employer's liability in the event of an employee's death. In addition to these benefits, group term life insurance policies also provide tax benefits to both employers and employees.

Requirements for Group Term Life Insurance

To be eligible for a Group Term Life Insurance Plan, one needs to meet certain requirements. Firstly, the policyholder must be a part of a group that is large enough to qualify for the policy, which may differ from one insurance provider to another. The minimum number of members required to form a group may range from min 10 members (with most insurers). The policyholder must also be within the age limit set by the insurance provider, which may vary from 18 to 69 years. The premium payments for group term life insurance plans may be contributed by the employer or the employees, depending on the terms of the policy. The policyholder must provide accurate information about their age, occupation, etc.


In addition to these, some insurance providers may require medical examinations and health checkups for group members.

Feature of Group Term Life Insurance Plan

Group term life insurance plans provide life insurance coverage to a group of individuals under a single scheme. These policies are typically purchased by employers or organizations for their employees or members. Here are some of the features of a group term life insurance plan:


  • Death Payout : If an employee dies while covered by the group life insurance plan, the total guaranteed amount is awarded to the person nominated the deceased individual.

  • Employee Cover by Default : Employees are automatically enrolled in the plan as part of their employee benefits package.

  • Premium Payment : The premium for the group life insurance plan is paid by the employer, though some employers may deduct the premium amount from the employee's pay.

  • Master Contract : All members of the group are covered under a master policy purchased by the organization. The organization must submit its KYC document (PAN & GST) at the time of purchase.

  • Contributory and Non-Contributor :There are two types of community life insurance - contributory and non-contributory. In contributory plans, the employee pays a portion of the premium, while the employer covers the rest. In non-contributory plans, the employer pays the entire premium.

  • Affordable : Group term life insurance plans are generally less expensive than individual plans.

  • Coverage : Coverage may be uniform or graded or salary linked, dedepending on the member's role or rank in the organization.

  • Tenure :The policy typically has a one-year limit and must be renewed annually.

  • Group term life insurance plans offer affordable coverage to all members of a group. Benefits of Group Term Life Insurance Plans.


    Group term life insurance plans provide a wide range of benefits to the members of a group. Here is an overview of the advantages of group term life insurance plans:

  • Universal Coverage : Group term life insurance plans provide basic coverage to all members of a group, regardless of whether they have an individual life insurance policy or not.

  • Tax Benefits : Employers and contractors can benefit from tax benefits on the premiums paid for group term life insurance plans. Additionally, death benefits are tax-free under Section 10(10D) of the Income Tax Act of 1961.

  • No Medical Check-ups : Group term life insurance plans typically do not require medical examinations before enrollment (T&C applies), relieving employees of the burden of undergoing such procedures.

  • Budget-Friendly : The premium for group term life insurance plans is much lower than that of individual plans due to cost savings from the pooling of resources and the management of a single policy.

  • Other Benefits : Some group term life insurance plans may also offer supplemental coverage such as critical illness and disability riders.

  • In summary, group term life insurance plans offer a comprehensive range of benefits that provide financial security to employees and peace of mind to employers.

What are the benefits of Group Term Life Insurance Schemes to Employers

Some of the benefits of group term life insurance plans to employers are as follows:


  • Cost-effective : Running insurance schemes on a group basis is more cost-effective than individual plans, as the insurer can combine different costs, including management, maintenance, and renewal into a single master policy.

  • Tax Benefits : Employers can receive tax benefits on group term insurance premiums, which can help reduce their overall tax liabilities.

  • Employee Retention :In large companies, group term insurance plans can also serve as a mechanism for employee retention, as employees feel valued and appreciated when they are offered additional benefits.

  • Disability Benefits :Some plans also provide disability benefits in addition to life insurance, which can be a valuable addition for employees who require additional support

What are the benefits of Group Term Life Insurance Plan to Employees

Group term life insurance plans provide significant benefits to employees by offering life insurance coverage to a group of individuals under a single policy. Some of the key benefits of group term life insurance plans to employees are:


  • Default Insurance Cover : Employees are automatically enrolled in the group term insurance policy upon joining a company, offering basic coverage to all employees irrespective of whether they have personal life insurance policies or not.

  • Customizable to Suit Employee Needs :

  • No Medical Check-ups :Employees are not required to undergo medical examinations before enrolling in group term insurance plans, which can be a relief for some individuals.

  • Death Benefits :In the event of an employee's death, group term insurance plans provide financial support and security to the employee's beneficiaries.

  • Tax Benefits :Employees can also benefit from tax deductions on the premium paid towards the group term life insurance policy.

  • Employment Retention :In large companies, group term insurance plans can also serve as a mechanism for employee retention as employees feel valued and secure.

Who is Eligible for Group Term Life Insurance

Group term life insurance is typically provided by employers or organizations to a group of individuals, such as employees, members of a fraternal organization, or members of a professional association. Eligibility for group term life insurance depends on the specific policy and the group or organization providing it. In general, employees are automatically enrolled in their employer's group term life insurance plan as part of their employee benefits package. Other groups or organizations may have their own eligibility criteria for group term life insurance.


Employee-employer groups, non-banking financial companies, banks, microfinance institutions, specialist groups, and non-employer-employee groups can buy group term life insurance plans for their members. The size of the group may vary from one insurance policy to another. The minimum age to enter the plan is 18 years old, and the maximum age limit is 79 years (depending on insurer product). icy. While some group term life insurance plans offer uniform and basic coverage to all members of the group, others may provide supplemental and graded coverage based on the member's position or role within the organization. Ultimately, eligibility for group term life insurance depends on the specific policy and the group or organization offering it.

List of Group Term Life Insurance Plan in India

There are several group term life insurance plans available in India, each offering various benefits to insured individuals. Here are some of the most popular plans:


  • Bajaj Allianz Group Term Life Insurance : This plan offers up to Rs 1 crore in life insurance coverage to the beneficiaries of the insured group member in case of their untimely demise. Additionally, it provides an add-on cover for critical illnesses that can help the insured expand their financial security.

  • Tata AIA Life Insurance Group Term Life : The Tata AIA Life Insurance Group Term Life plan offers comprehensive life cover with a minimum sum assured of Rs. 5000 and no maximum limit. The plan provides ease and flexibility of premium payment along with tax deductions.

  • Future Generali Group Term Life Insurance Plan :This plan has been designed to offer affordable life insurance cover to all members of a group. It provides death benefits to the family of the insured group member and comes with several riders, including accidental death, critical illness, permanent total disability, etc.

  • IndiaFirst Group Term Life Insurance Plan :This plan is designed to protect the members of a group and secure the future of their families at affordable rates. It is available to groups of at least 50 members, and the minimum policy cover available is Rs. 5000 per member.

  • Overall, these group term life insurance plans provide a wide range of coverage options to suit the needs of different individuals and organizations. One must refer to the latest policy documents for latest and accurate information. It's important to carefully evaluate the applicable benefits of each plan and choose the one that best meets your specific needs.

Frequently Asked Questions

Group term life insurance provides coverage to a group of people, such as employees of a company or members of an association. The policyholder pays the premiums, and in the event of a member's death, the policy pays out a death benefit to the member's beneficiaries.
Some disadvantages of group term life insurance include the fact that the policy ends when a member leaves the group. Additionally, the premiums may increase as members get older, making it less affordable in the long run.
The primary difference between individual life insurance and group term life insurance is the number of people covered. Individual life insurance policies provide coverage for a single person, while group term life insurance policies provide coverage to a group of people. Additionally, group term life insurance premiums are generally lower than individual life insurance premiums.
Common riders available with group term insurance plans include accidental death and dismemberment coverage, waiver of premium, and accelerated death benefit. These riders can provide additional coverage options and financial protection to members.

Insuropedia

What affects the Premium of Group Term Life Policies?

A Group term policy is purchased by an organization, to cover a minimum number (group) of employees. The very nature of this policy affects the premium amount. An employer usually chooses to cover all insured members under the same risk and therefore, pays a lump sum premium to the insurance company. It means
Read More

Why Premiums Are Lower in Group Term Policy Than Individual Term Policies?

The premiums for the group term policies are dependent on various factors, like number of people insured in the group, the average sum insured per person, average age of the group members, occupational risk of the group, etc. Insurance premium consist of three components: Risk Premium Loading for Office Expenses Investment
Read More

How to decide coverage under the Group Life Insurance Policy?

The employer can choose different benefit calculations to determine the amount of coverage for the employees. For group insurance contract, employees are assigned to different classes and schedule of benefits are attached to different classes that determine the amount of coverage that will be provided to the employee of each
Read More

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