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Group Life Insurance Eligibility: Everything That You Need to Know

Considering life’s unpredictability, everyone wants to ensure their loved ones remain secure in their absence. One way to show you care is to buy a life insurance cover that takes care of your family’s dreams if anything unfortunate happens to you. Opting for group life insurance is one of the types of life insurance that offers coverage at lesser costs than an individual life insurance plan.
 

Group life insurance, as the name implies, is a life insurance plan that covers a group of people under a single policy. It is an attractive and affordable insurance tool that provides life cover to members of a group and protects their loved ones during a mishap.
 

Find out more about group life insurance eligibility, its features and benefits.
 

Features of Group Life Insurance


A group life insurance policy is an effective way to keep employees motivated while retaining talent in the organisation. The features of group insurance are as follows:
 

  • Group life insurance involves the issue of a single Master Policy in the name of the group covering all its members.
  • The minimum number of members covered by a group life insurance is usually 25. But this number may vary with insurance providers.
  • A group policy is issued for one year at a time, after which it can be renewed.
  • The premium of a group life insurance policy is either paid by the employer, its members or both.
  • The premium is usually paid in a lump sum, depending on the sum assured, members’ age and the group’s size.
  • A group life plan covers all eligible members by default, irrespective of their health. But the rules may differ for non-employer-employee groups.
  • A group life insurance plan is less costly than an individual life insurance policy as it covers all group members with a single premium.
  • Group life insurance does not involve medical underwriting for each member. Instead, the insurer underwrites the entire group according to its nature and composition.
  • Usually, group life insurance terminates with the present employment as per the rules. But some insurance providers allow converting group policy into individual life insurance when the employee quits employment or leaves the group.
     
Applicability of Group Life Insurance


Group life insurance is a plan taken for several people with a single premium. But the members must not have created the group specifically to buy group life insurance. Hence the groups to which the insurance plan is applicable are as follows:
 

  • Employer-employee groups
  • Banks
  • Non-banking financial institutions
  • Non-employer-employee groups
  • Microfinance institutions
  • Professional groups

Eligibility Conditions for Group Life Insurance


The group life insurance eligibility criteria for each group may vary according to its requirements. Some group life insurance plans offer uniform coverage to all the members, while others offer graded or CTC (Cost to Company) based life coverage according to the salary or hierarchical position of the group members. Further, the minimum age to avail of group term insurance is 18 years, while the maximum age ranges between 65-69 years.
 

Benefits of Group Life Insurance
 

 

The group life insurance policy benefits are as follows:
 

  • Group life insurance costs less than an individual life insurance plan making it beneficial for both the employer and the employee.
  • Group life insurance plan helps secure the financial future of the employees’ loved ones by providing the death benefit to the nominees.
  • The mode of group insurance policy premium is convenient as it is deducted automatically from the employee’s salary account.
  • The premium of a group plan is considered an expense under Section 37 of the Income Tax* Act, 1961, thus offering tax* benefits to the employer.
  • Employees also benefit from tax* deductions up to ₹1.5 Lakh under Section 80C of the Income Tax* Act if they contribute to the plan. Moreover, the death benefit is also tax*-free under the said act.
  • Group life insurance policy does not include individual underwriting, which makes it convenient for all members.
  • The life insurance plan also provides riders# at extra costs that include accidental death, disability and critical illness.
  • Group life insurance allows adding or removing new members according to the organisation’s needs.
  • The claim settlement process of group life insurance is hassle-free, where the employees or their beneficiaries are required to submit the necessary documents to claim the benefit.
     
Points to Remember


While buying a group life insurance policy, it is crucial to keep these essential things in mind:
 

  • Choose an adequate sum assured that protects the group members appropriately in an eventuality.
  • While buying a group insurance policy from an insurance provider, ensure the company provides a hassle-free and quick claim settlement process.
     
Conclusion


So, if you are part of a group that is eligible to buy a group life insurance policy, you must benefit from the plan. While eligibility depends on several factors, such as the age of the members in the group, their professional ranking, salary, etc., it is essential to opt for plans that provide adequate coverage along with affordable premiums.
 

Tata AIA Group Term Life Plan offers adequate protection to all the group members and their loved ones. With us, you can avail of pure term insurance, gratuity, superannuation and loan cover, and other benefits. Moreover, we ensure hassle-free enrolment of members with no additional documents and a quick claim settlement process.  

L&C/Advt/2022/Dec/3210

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Tata AIA Life Insurance

A joint venture between Tata Sons Pvt. Ltd. and AIA Group Ltd. (AIA),  Tata AIA Life Insurance  is one of the leading life insurance providers in India. We post everything you need to know about life insurance, tax savings and a variety of lateral topics such as savings and investments in this space. You can access and read a host of different blogs, articles and pages at the Tata AIA Life Insurance Knowledge Center or get in touch with us with any queries or questions!

View all posts by Tata AIA Life Insurance

Frequently Asked Questions

What are the benefits of group life insurance plans?

For employees, the benefits include hassle-free claim settlement, no medical screening for buying the policy, and affordable premiums if they have to pay the premium from their own salary. For employers, it includes tax benefits, employee retention, and affordable premiums if they are paying for the policy of their employees. 

Is individual life insurance required with group life insurance?

Yes, it is advisable to have an individual life insurance plan to ensure you have optimum coverage. The group life insurance will cease to exist if you leave your job, but the individual policy will keep you covered.

Disclaimer

  • Insurance cover is available under the product.
  • The products are underwritten by Tata AIA Life Insurance Company Ltd.
  • The plans are not guaranteed issuance plans, and they will be subject to Company’s underwriting and acceptance.
  • For more details on risk factors, terms and conditions please read the sales brochure carefully before concluding a sale.
  • This blog is for information and illustrative purposes only and does not purport to any financial or investment services and does not offer or form part of any offer or recommendation. The information is not and should not be regarded as investment advice or as a recommendation regarding any particular security or course of action.
  • Please know the associated risks and the applicable charges, from your Insurance agent or the Intermediary or policy document issued by the insurance company.
  • Every effort is made to ensure that all information contained in this blog is accurate at the date of publication, however, the Tata AIA Life shall not have any liability for any damages of any kind (including but not limited to errors and omissions) whatsoever relating to this material.
  • *Income Tax benefits would be available as per the prevailing income tax laws, subject to fulfilment of conditions stipulated therein. Income Tax laws are subject to change from time to time. Tata AIA Life Insurance Company Ltd. does not assume responsibility on tax implications mentioned anywhere in this document. Please consult your own tax consultant to know the tax benefits available to you.
  • #Rider is not mandatory and is available for a nominal extra cost. For more details on benefits, premiums, and exclusions under the Rider, please contact Tata AIA Life's Insurance Advisor/ branch.