Here is why every business should consider buying a group life insurance for its employees:
- Financial Protection Employee’s Dependents: The group life insurance plan offers financial protection to the family of the employee and helps them to be stress-free about their dependents’ financial future.
- Increased Productivity: A stress-free environment helps nurture creativity and employees may not hesitate to go the extra mile to achieve employment objectives.
- Attract and Retain the Talent: The group plan makes the employee feel that they are a valued part of the organization. Also, consider Life insurance as one of the hygiene factors for best employers. It helps the company to attract more talented people.
- More Financially Attractive: If there is no group plan offered by the company, then the employees need to subscribe to a life insurance policy themselves to protect their life for which the employee needs to pay more (approximately 30% more than the group premium) out of pocket. This reduces the savings in the hands of the employees. Whereas in the case of group plans the employee gets more hand compensation.
- Tax Benefits: The amount contributed by the business towards the group life plan, consider as the business expense and not included in the profit.
So, the group insurance plan shall help your business grow more competitive.
Read More: What is covered under Group Life Insurance Policy?
The case for the Importance of Group Life Insurance
XYZ Pvt. Ltd. was experiencing an increasing attrition rate for the last few years. The CEO Mr. Subeer Chakrobarty was worried as the organization had a reduced internal talent pool. From which they could pick up future managers. The average tenure of employment for mid and junior-level employees had come down to 3.5 years from the industry average of 6 years.
This was also leading to a huge loss for the company. Since the new employees needed training and as the HR head later realize, the organization had become a ladder organization. For the qualified talent to earn experience and then shift to other organizations.
The management of the company contacted the HR department and asked them to find the reason behind this huge turnaround. The HR department after extensive inquiries concluded that all the companies were providing insurance cover to all their employees. With the same compensation package as offered by XYZ Pvt. Ltd., This was making XYZ less competitive in the employment space.
So, XYZ Pvt. Ltd. finally decided to take a couple of group insurance plans including the group life policy. This step has improved the attrition rates quite well and the retraining costs for the staff.
The tradeoff between the training and attrition costs and the premium costs of the group policies has almost doubled for XYZ, which hopes to land among the best employers soon.