Most companies offer group-term life insurance policies to their employees. The policy ensures that even after the death of the employee, his/her family’s future is secure. At the time of buying group term life policy (GTL insurance). The insurer takes into account all the current employees, in case, more employees join the organization.
The following conditions will be applied in respect of GTL insurance –
- Group-term life insurance covers all new employees who meet the eligibility criteria.
- The group term life insurance coverage will commence when the company enters the employee’s name into its register and communicates the information to the group term insurance company.
- If an employee enters the group term life insurance scheme between the two annual renewal dates. It is necessary for the employer to submit the particulars of the same to the group term life insurance company on a monthly basis
In order to extend group term life insurance coverage to new employees, it is necessary for the employer to pay the proportionate premium for the remaining part of the policy year
Once the new employee is also covered under a group term life insurance policy, it is the duty of the company to inform him/her about the insurance benefits and give policy documents. Once all the detail about the employee is received by the group term life insurance company. A policy ID card is issued to him/her which can be used to avail of cashless treatment at network hospitals.
Here it is important to note that some companies offer different sums assured to their employees on the basis of their salary and job profile. It means, if a company has both manual labor and white-collar office employees. The company can go for separate group term life insurance coverage for both of them on the basis of their salary and job profile.
Case
Since 1999, L.K Construction has become a reputable name in the industry. In addition to offering various benefits, the company is also offering group term life insurance to its employees. As the company has both manual and white-collar employees. It has bought separate group term life insurance coverage for both categories from one insurance company.
While one coverage was of Rs 10 lakh, the other was Rs 50 lakh.
At the time of buying the group term life insurance, the company had 100 employees, which has now increased to 220.
Read More: What are the advantages of Group Term Life Insurance policies?
Whenever a new employee joins the organization, its HR department informs the insurance company. Last year, ten new employees joined the company, and the HR division informed the group term life insurance company about them. In this case, two employees belonged to the top management team. All of them were eligible for coverage under the GTL insurance policy. The insurer agreed to cover them and asked for the details, like name, salary, age, nominee details, etc.
As two employees were from top management. The group term life insurance coverage for them differed from what the rest of the 8 employees, who were manual laborers, were offered. Here the coverage extended to two employees was more than the rest of the other employees.
Also, as L.K Construction was covering new employees under a group term life insurance. The company also paid an additional insurance premium, calculated proportionately for the remaining policy tenure. As group term life insurance coverage extended to two employees was more than the rest of the employees. L.K Construction had to pay a higher premium for them as compared to what it paid for the rest of the employees.
About The Author
Varun
MBA Finance
Varun has established itself as a knowledgeable and reliable expert in the field with 8 years of experience. Specializing in group-term life insurance, they have dedicated their career to helping businesses and individuals navigate the complexities of insurance products and services. Currently writing for SecureNow, he produces insightful blogs and articles that demystify group-term life insurance, offering practical advice, industry updates, and strategic insights. Their deep understanding of the insurance landscape and talent for clear and engaging communication make their content invaluable for both seasoned professionals and newcomers alike.
