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How Does Group Term Life Insurance Work?

By Finserv MARKETS - Aug 20,2019
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How Does Group Term Insurance Work

For any organisation an employee is the most important asset. Happy and productive employees contribute towards the growth of the organisation. Therefore, happier the employees higher the chances of the organisation to flourish. To keep the employee happy, an organisation has to consider about the complete welfare of the employee, and providing insurance is one of them. A group term life insurance ensures the financial security of the beneficiaries of an employee even after his/her death. Even the smallest amount in such scenarios, can be of great help to the dependents of the deceased employee.

What is a group term life insurance cover?

As the name suggests, this policy is for a group of people. Firms who meet the criteria of minimum strength can avail the policy for their employees. This policy covers all the employees under a single sum assured. The sum assured for each employee is decided based on their designation, marital status, number of family members etc. For instance, the Bajaj Allianz Group Term Life Insurance plan available at Finserv Markets offers coverage of up to Rs. 1 Crore.

Who pays the premium for the policy?

The employers pay the premium of group term life insurance policy. However, should an employee want additional features in the policy, he can do so, by paying a certain amount per month from his salary. The premium is not same for every employee and depends on the age of the employee and size of the organisation. The members can also be added or removed at any time of the year.

Policy Benefits:

A Group Term Life Insurance Plan offers a host of benefits such as:

  • Cheaper group term policies as compared to individual policies
  • Financial security for the beneficiary of the employee under unfortunate circumstances
  • Easy to fund gratuity liability under this policy cover
  • If your fund performs well, it will be more economical
  • Group term insurance policies with gratuity benefits for employers

How to avail Group Life Insurance?

It is always better to know about the procedure including the settlement, for a hassle-free process:

Selection of Sum Assured

The sum assured depends on what the employer wants to offer the employee. There are multiple categories of cover, they are:

Flat Cover – for all the employees (for small organisations, start-ups etc.)

Graded Cover – for large organisation with multiple hierarchies

Salary Multiple – for organisations with varying compensations for same level employees

Selecting the Riders

Riders are the additional benefits that are added to the term policy

You can also provide the option of settling the car or home loans of the employees

Premium Estimate

Once you have finalised a sum assured and rider benefits your insurance provider will give you an estimate of the premium.

The premium for availing the base policy will be lower than the life cover plus riders.

Payment of the Premium

After the sum assured and rider benefits are decided, you need to complete the paper-work and pay the premium.

All employees are covered for one year and the policy is renewable annually.

Issue of the Master Policy

Submit the required documents and the insurer will verify the details and assess risk through underwriting.

The employer is handed a master policy document to check the justification of premium rate.

Filing a claim under group term life insurance:

At Finserv Markets, swift claim settlement process is ensured. Following are the documents required:

  • Claim of the insured
  • Certificate of insurance
  • Death Certificate
  • Bank Certificate
  • Current address proof
  • Photo ID proof of the claimant
  • Bank Pass Book
  • Submission of document like death certificate

Once the settlement is made, a date is given by which the settlement will be handled. The claim is settled on the amount which was fixed by the employer.

A group insurance policy is the best way to get a plan for an entire group of people without the hassle of extra work. You also get the added benefit of customization, such as opting for an add-on cover that covers critical illnesses like cancer, kidney failure or heart attack. Bajaj Allianz Group Term Life Insurance from Finserv Markets offers a life insurance cover at affordable premiums. With Bajaj Group Term Life Insurance no medical examination is required even for a higher sum assured. Check out the Finserv Markets website to find answers to all your Group insurance related queries.

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Bajaj Finserv Direct Limited ("BFDL"), erstwhile Bajaj Financial Holdings Limited is a registered corporate agent of Bajaj Allianz Life Insurance Company Limited and Bajaj Allianz General Insurance Company Limited under the IRDAI composite registration number CA0551 valid till 10-Apr-2021. BFDL also renders services to Bajaj Finance Limited (‘BFL’) and Bajaj Housing Finance Limited (‘BHFL’) (referred hereinafter as ‘Lending Partner’) in sourcing of customers, providing preliminary credit support activities, fulfilment services and post-acquisition customer services related to lending business. Registered Office: Bajaj Auto Limited Complex, Mumbai – Pune Road, Akurdi, Pune – 411 035 CIN: U65923PN2014PLC150522