As the name itself suggests, a group term life insurance is designed to offer life insurance to a group of people under a single policy. Group insurance does not limit to employer-employee groups only because it extends to other groups like banks, NGOs, etc.; also.
Here are some of the benefits of group-term life insurance policies:
Default insurance cover:
Group policies provide ‘auto cover’ to members simply by being part of that group. The policy ensures at least a basic insurance cover for those who are without any life insurance policy.
Free cover limit:
As offers insurance to all members of the group, irrespective of their health condition is of great value to people who belong to a high-risk group or find difficulty in buying a policy.
Tax benefits:
In many cases, employers get tax benefits on group insurance plans, and the policy can help them in reducing their tax liability.
No need to worry about premium payment:
As the premium is directly deducted from the employee’s salary, there is no chance of missing the premium payment. It also reduces the chances of policy lapse due to non-payment of premiums. In some cases, offers the policy free of cost.
Easy premium payment options for employers:
Depending on the organization’s needs, the employer can choose monthly, quarterly, half-yearly and annual premium payment modes at their convenience.
Useful for employees’ well-being:
Group-term life insurance policies play an important role in the employee welfare and retention scheme and it offers financial security to the family even in the absence of the employee.
Coverage can be extended with riders:
By adding riders to the main group insurance policy, the insurer can expand the coverage. However, Riders like education allowance, repatriation allowance, accidental death, etc.; offer a multitude of benefits and thus, bought along with the main insurance policy to get comprehensive coverage.
Cost-effective:
As the group plan covered many people, the premium of a group term policy is much lower as compared to an individual policy.
Worldwide coverage:
Group term life insurance policies offer worldwide coverage. It means if the policyholder dies in a foreign land, then entitles his/her nominee to get the benefit here in India.
Group-term life insurance can provide several benefits to an employer, including attracting and retaining talented employees, enhancing employee morale and loyalty, and improving overall job satisfaction. Additionally, it can offer tax advantages to the employer and may help to reduce employee turnover.
Group-term life insurance provides employees with financial protection for their loved ones in case of their untimely death. It offers affordable coverage with no medical exam required, and the premiums are often lower than individual policies. Additionally, it provides peace of mind and can help to attract and retain employees.
There is a growing need for group-term life insurance as more employees seek financial protection for their families in case of an unexpected death. Employers are also recognizing the benefits of offering this coverage to attract and retain top talent, and it can be a cost-effective way to provide a valuable employee benefit.
Case Study
Ravi Sharma, 45, was a married man with two kids. He was a chain smoker and last month, he succumbed to a heart attack, leaving his family without much required financial protection. But, he never listened to his friend who always advised him to go for life insurance. The death of the breadwinner, Ravi, devastated the family not only emotionally but financially also. Luckily, the company in which Ravi was employed covered him under the group-term life insurance policy. The group insurance policy paid a lump sum amount to the nominee of Ravi. Thanks to it, the family did not face difficulty in meeting their household expenses even when Ravi was not around to give financial assistance.
