Group Term Life Insurance

Group term life insurance is a policy that covers a specified period for a group of individuals. It usually caters to individuals within an organization or association. Companies or professional associations often provide this insurance as a benefit to their employees or members.

One of the main features of group term life insurance is the death benefit. This is the money paid to the heirs when the insured person dies. The death benefit provides a lump sum payment, supporting the insured person's loved ones financially after their passing.

Group term life insurance provides coverage to a collective, often employees or members of an organization. This policy lasts one year, providing a death benefit to the claimants if a member passes away during employment.

The premium, paid by the employer or shared, depends on policy terms. Coverage amounts are typically salary-based or uniform for all members. Group Life insurance plan is affordable compared to individual life insurance policies because of the shared risk among members.

Group term life insurance cover provides benefits to employers and employees, including tax benefits and flexible coverage. Most employees don't require medical check-ups. GTL insurance plans offer a practical, cost-effective solution for life insurance coverage for a large group.

Group term life insurance covers groups like employees or organization members, securing life insurance benefits for the insured individuals. In group term insurance, one policy covers all members, with the employer or organization usually paying the premium. The policy grants a lump-sum payment to the dependent if a group member dies within the policy term.

Typically, policy holders renew group term insurance policies annually after the initial one-year term. The policy premium depends on factors such as group size, age distribution, and coverage amount for each member. Group term insurance is generally more cost-effective than individual policies. Insurers consolidate management, maintenance, and renewal costs into a single policy.

One benefit of a group term insurance policy is providing coverage to all group members. It applies regardless of age, occupation, or health status. However, coverage ends when a member leaves the group, and the policy is not portable to an individual policy.

Group term life insurance provides several advantages to both employers and employees. Firstly, it offers fundamental life insurance coverage to all group members, irrespective of age, occupation, or social context. This implies that the policy automatically covers all members of the group.

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 employer pays the policy premium, and in some cases, the employee may share a portion of the premium.

This can help to reduce the employer's liability if an employee's dies while at work. In addition to these benefits, group term life insurance policies also provide tax benefits to both employers and employees.

To be eligible for Group Life Insurance, one needs to meet certain requirements. Firstly, the policy-holder must be part of a group eligible for the policy. This qualifying criterion may vary among insurance providers.

The minimum number of members required to form a group may range from min 10 members (with most insurers). The insurance provider sets an age limit, usually between 18 and 69 years as the criteria. The employer or employees can pay the premium for group term life, depending on the policy terms. The policy holder 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.

Group term life insurance plans provide life insurance coverage to a group of individuals under a single scheme. Employers or organizations typically purchase these policies for their employees or members. Here are some of the features of a GTL Insurance:

• Death Payout : If a covered employee dies, the nominated individual receives the total guaranteed amount.


• Employee Cover by Default : The plan automatically enrolls employees as part of their employee benefits package


• Premium Payment : The employer pays the group life insurance premium, possibly deducting it from the employee's pay.


• Master Contract : The organization purchases a master policy covering all members of the group. The organization must submit its KYC document (PAN & GST) at the time of purchase.


• Contributory and Non-Contributory :There are two types of community life insurance - contributory and non-contributing. 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 life insurance schemes are generally less expensive than individual plans.


• Coverage : Member roles or ranks in the organization determine coverage options, whether uniform, graded, or linked to salary.


• Tenure : Typically, the policy has a one-year limit and requires renewal on annual basis.


• Universal Coverage : Policy provides basic coverage to all members, irrespective of they are holding an individual life insurance policy.


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


• No Medical Check-ups : : No medical exams required before enrolment (T&C applies), easing burden on employees from undergoing tests.


• Budget-Friendly : Group life insurance scheme premium is lower than individual plans because of pooled resources, single-policy management.


• Other Benefits : Some group term life insurance plans may include critical illness and disability riders for additional coverage.



In summary, group term life insurance provides employees with financial security, offer employers peace of mind through comprehensive benefits.

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

• Cost-effectiveness : Affordable as insurers combine management and renewal costs, offering a cost-effective solution compared to individual plans.


• Tax Benefits : Employers receive tax benefits on group term insurance premiums, aiding in lowering their overall tax liabilities significantly.


• Employee Retention :Group term insurance plans in large companies serve as a retention mechanism. Employees value and appreciate the additional benefits offered.


• Disability Benefits :Some plans offer disability benefits alongside life insurance, valuable for employees needing extra support.

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

• Default Insurance Cover : The company automatically includes all employees in the group term insurance policy upon their commencement of employment. This policy offers coverage to everyone, regardless of whether they have their own life insurance or not.


• Flexible : Add-on covers, like tuition premiums, accidental death, return allowance, and critical illness, enhance the policy. These additions provide comprehensive benefits to employees.


• No Medical Check-ups : Enrolling in group term insurance is convenient as it doesn't demand medical examinations beforehand.


• Death Benefits : Group term insurance offer financial support and security to the employee's family if the employee passes away.


• Tax Benefits : Employees enjoy tax deductions on premiums paid for group term life insurance policies, providing additional financial advantages.


• Employment Retention : Large companies use GTL insurance for employee retention, fostering a valued and secure workplace environment for employees.

Employers or organizations provide group life insurance plan to people within a group, such as employees or members. Fitness for group term life insurance depends on the specific policy and the group or organization providing it. Typically, employers automatically enrol employees in the group term life insurance plan as part of the benefits package. Other groups or organizations may have their own entitlement criteria for group term life insurance.

Employee-employer groups, banks, micro-finance institutions, and others can purchase group term life insurance plans for members. Non-banking financial companies, specialist groups, and non-employer-employee groups are also eligible buyers.

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 the insurer product).

Group life insurance comes in two variations, each tailored to suit different needs and preferences. The first type covers everyone equally. The second type provides extra coverage based on a person's job or role in the organization. Ultimately, competence for group term life insurance depends on the specific policy and the group or organization offering it.

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

• Bajaj Allianz Group Term Life Insurance : The plan offers up to Rs 1 crore in life insurance coverage. receive it if the insured member meets an 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 plan provides comprehensive life cover. Minimum sum assured is INR 5000, with no maximum limit. The plan provides ease and flexibility of premium payment along with tax deductions.


• Future Generali Group Term Life Insurance Plan :Plan designed for affordable life insurance cover for all group members. It grants death benefits to the insured member's family. Riders include accidental death, critical illness, permanent total disability, and more.


• IndiaFirst Group Term Life Insurance Plan :Group plan safeguards members, ensuring family security with affordable rates. Groups with minimum 50 members can access this offer, providing a minimum policy coverage of INR 5000 per person.

These plans offer diverse coverage options, catering to various individuals and organizations, providing a broad range of insurance solutions. One must refer to the latest policy documents for the latest and accurate information. Evaluate each plan's benefits to choose the one that meets your specific needs.