Benefits that are often provided by employers and are aimed towards the welfare of their employees, is known as group term life insurance. Check out the essentials of this insurance type.

This benefit is provided by many employers absolutely free of cost, or, at a base amount of the coverage. Along with this, sometimes, employers also provide the ability to buy supplemental coverage by deducting the amount from their staff’s payroll. The insured employees also have the privilege of buying the same coverage for their spouse and children.

What Portion of your Income in Insured?

The extent of coverage would certainly differ from one employer to the other. This variability might be dependent upon the position that an employee holds in the organizational hierarchy. Benefits offered to the top level of management might vary significantly from those being offered to the lower level or daily workers.

As a beginner in the world of group life insurance, it is advisable that you look at the policy document for a better understanding of the amount and type of compensation associated with the policy. For instance, several group plans might only include the base pay; while other compensations such as incentives, commissions or bonuses might be excluded.

Premium Cost

The costs associated with a group term plan will be pretty less in case you are young. But the rates would go up with your age because group participants might not be required to endure underwriting. One of the essential features of a group plan is that it automatically covers all the eligible employees, irrespective of their health condition. Most plans come up with associated rate bands in which the cost increases automatically. If your health condition is good, then it is essential to note that a portion of your premium would help your colleagues who might otherwise be uninsurable.

Benefits to Employers

Group term life insurance policies are equally beneficial to both employers and employees:

  • Employers enjoy the benefit of paying off their gratuity liability under the privilege of group term life insurance policies.
  • They can gain returns from the funds as per the selected funds’ performance
  • These types of policies are more cost effective to the employers in India because the cost of administering group policies is low.
  • High performing funds would earn better returns for employers. As a consequence, the expense of employers would decrease.
  • Some policies provide both life insurance as well as gratuity benefits to employers

Benefits to Employees

Following is the list of available benefits to employees through group term insurance plans:

  • Employees can be assured of the financial assistance extended to their families in case of their death, severe illness, or other insured eventualities.
  • The premiums paid off by employers are not considered as perquisites.
  • Employees get the privilege of enjoying death benefits that provide tax relaxation under Section 10(10D).
  • Simple documentation modes initiate easy administration for all employees alike.
  • A group term insurance plan can be tailor-made for satisfying the niche needs of enrolled employees
  • This coverage plan provides safety to the financial interest of the insured employer and employees alike.

Evolving as an important constituent in the benefit lists offered by modern-day employers to their employees, a group term life insurance is a much needed move in today’s competitive environment. This is because, other than providing financial assistance to the employees, this kind of insurance policy also helps in retaining the staff for longer time periods.

Apply for a group term insurance today!