As life becomes ever more uncertain, many individuals are choosing life insurance plans to ensure that their loved ones stay financially secure during an eventuality. However, many still don’t consider buying an individual life insurance plan believing it to be an unnecessary expenditure.
 

But with lesser costs, easy procurement, and hassle-free claim processes, group plans might change your views. Let’s find out what a group life insurance plan is and its features and benefits.
 

What is Group Life Insurance for Employees?
 

Group life insurance is a life insurance policy that covers members of a group under a single plan. A group life insurance policy is usually term life insurance, and hence it is also known as a group term plan. With premiums lesser than individual life insurance, a group life policy is an effective tool many organisations use to motivate their employees.
 

The groups that are eligible for group life insurance plans include:
 

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

What are the Features of a Group Life Insurance Policy?
 

The features of group life 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.
• A group life policy premium is either paid by the employer, its members, or both.
• The premium is usually paid in a lump sum which depends on the sum assured, members’ age, and the group’s size.
• A group life insurance plan is less costly than an individual plan as it covers all group members with a single premium.
• Employee group life insurance is issued for one year at a time, after which it can be renewed.
• The minimum number of members covered by a group life policy is usually 25. But this number may vary with insurance providers.
   

Group life insurance does not involve medical underwriting for each member. Instead, the insurer underwrites the entire group according to its nature and composition.
 

What are the Benefits of Group Life Insurance?
  

The reasons that make group life insurance policies worth buying are as follows:
 

• Group life insurance cost is less than an individual life insurance plan, making it beneficial for both the employer and the employee.
• Group life insurance plans help secure the financial future of the employees’ loved ones by providing the death benefit to the nominees.
• The mode of premium payment in the group life policy is convenient. It is because the premium is deducted automatically from the employee’s salary account.
• Group life insurance also provides riders^# with extra costs that include accidental death, disability, and critical illness.
• Group life plan offers tax* benefits to the employer as the premium paid is considered an expense under Section 37 of the Income Tax* Act, 1961.
• 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 claim settlement process of group life insurance is hassle-free. The employees or their beneficiaries are required to submit the necessary documents to claim the benefit.
   

Factors to Consider Before Buying Group Life Insurance
 

A group life insurance is essentially an affordable insurance plan that protects an organisation’s members. It is beneficial not only for the employees but also for the employer as it offers tax* benefits and helps retain talent in the organisation. However, the following factors should be considered before buying group life insurance:
 

• Look for a policy online
  
  While buying group life insurance, consider buying it online to avoid the agent’s fee. Also, buying the policy online is free of hassles and helps save time.
  
  
• Choose an adequate sum assured
  
  While the sum assured under a group life insurance is usually determined by the insurance provider according to the members’ age, income, and position, it is recommended to choose a suitable sum assured that provides adequate protection to the employees during an eventuality.
  
  
• Check premiums
  
  Group life insurance is essentially an affordable life cover. However, analyzing different plans provided by different insurance companies helps you choose the most appropriate plan that offers adequate coverage at low premiums.
  
  
• Check the network of hospitals of the insurance provider
  
  Group life insurance plans may also include critical illness coverage for the employees. Hence it is essential to check the network of hospitals of the insurance provider. Ensure that the insurance provider has an extensive network of hospitals that provides cashless and hassle-free claim settlement.
   

Conclusion
 

Group life insurance offers immense benefits to the employer and the employees. It is a good way to offer life coverage to several people under one policy with a single premium. Apart from life coverage, comprehensive group insurance also provides gratuity benefits to the members after they complete a certain period in the organisation.
 

With us, you can avail of pure term insurance along with 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/3213