Group Term Life Insurance - An Overview

1. What Is Group Term Life Insurance? Companies offer group term insurance plans to their employees. With group term insurance, you can make sure that the future of your family members is financially secure after your demise. Group term life insurance policy, as the name suggests, is a kind of insurance coverage provided to a group of people. It offers financial independence to the insurer and their loved ones in case of unfortunate events. Before we dive deep into the subject of group term life insurance, let us first know what is term insurance plan? What Is Term Insurance? The term life insurance policy is nothing but a life insurance plan that offers protection for a specific period. In case you die in the specified term, the policy provides death benefits to your beneficiaries. However, unlike permanent insurance, the term insurance plans have no cash value. The only advantage it guarantees is the death benefit after your demise. Now, let us understand what a group term life policy is. Nature of Group Term Life Insurance When it comes to the group term life insurance, understanding the nature of the policy is essential. It is offered to all the members of the group on underlying conditions and insurability No need to provide medical reports Maturity value is not provided The policy covers death How Does Group Life Insurance Work? Here’s a quick rundown on how the policy functions – The group admin will be issued a master policy for which they pay an initial premium. The initial premium amount covers all the group members for at least a tenure of one year. Then, the group members are given the option to choose the sum assured of their choice. This amount can be a lump sum amount or can be linked to their salary account/loan account. Group life insurance plans are generally renewable. The premium amount after one year is charged based on the alternations made. Group Term Life Insurance – Employer Benefits Following are the employer benefits provided by the group life insurance policy. Employers can fund their gratuity liability easily under group term life insurance. As gratuity funds are strategically built to reduce the gratuity payments, it thus reduces the burden on the employers. The returns on the funds are gained depending on the performance of the chosen funds.

2. In India, group term life insurance is economical as it has a relatively lower cost. Better fund performance will gain you better returns, thus decreasing the employers’ expenses. Group Term Life Insurance – Employee Benefits Following are the employee benefits of group term life insurance. Employees are provided financial assistance, which is extended to their family members during unfortunate events. Employees are covered for any medical expenses done within the free cover limits. The premium amounts paid by the employers are not treated as gratuities. Death benefits are exempted under Section 10(10D). Requires minimal documentation Tailor-made plans to suit the needs of the employees Provides security to the family members Group Term Life Insurance – Features Group term life insurance plans have many beneficial features, which makes it the ideal policy for the working class. Here are a few highlights of the group term life insurance – Members can be added in the group at any time of the year A pre-decided sum assured is paid to the beneficiaries of the insured individuals in case of any unfortunate event Add-on covered are available as riders for covering critical illnesses, disabilities, and accidental deaths Easy application processing Minimum group size required is of 50 members Build-in benefit for terminal illnesses Relatively cheaper than individual plans A Final Thought Group term life insurance plans are the best for companies and small businesses. If you are looking for term insurance for your employees, get in touch with us at Finserv Markets. With Bajaj Allianz Group Term Life Insurance plans from Finserv Markets, you can benefit from features like extensive coverage, bespoke insurance plans, affordable premium rates, and so much more. So, why wait? Buy Bajaj Allianz Group Term Life Insurance with us, today! Finserv Markets, from the house of Bajaj Finserv is an exclusive online supermarket for all your personal and financial needs. Loans, Insurance, Investment and exclusive EMI store, all under one roof- anytime, anywhere!