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How Is Group Term Life Insurance Different from Personal Insurance?

By Finserv MARKETS - Aug 23,2019
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Difference Between Group Term Life Insurance & Personal Insurance

Deciding between various life insurance options can be taxing. When you hear words like ‘group term life insurance’ and ‘personal insurance, it’s natural to wonder about the best personal insurance and how does group term life insurance work. You may even wonder which policy is right for you. You often think of which is the best term insurance to get and whether you should pick one, or pick both.

Whatever be your choice, getting an insurance is important. A study conducted in partnership with market research firm Kantar IMRB revealed that the overall India Protection Quotient (IPQ) stood at 35. The IPQ, on a scale of 0 to 100, measures the degree to which an individual feels protected from uncertain events in life. To help you choose, here’s a breakdown of what each sort of life insurance means and how they differ. The study also revealed that 34% of the respondents didn’t have any plans to support themselves financially once their savings are exhausted and uncertainties such as critical illness come in.


Personal insurance

Personal insurance makes sure that you and your family are secured in the unfortunate event of a severe injury or illness, losing the ability to earn by permanent disablement or death.

You can carry personal insurance policies until your retirement. With these policies, you pay a premium rate which depends on your age at the time of acquiring the policy. Even though premiums are higher at first, they don’t increase with age, neither does the coverage of the policy decrease or change as you grow older.

You can save some money over the life of the policy and continue it for a considerable length of time. Thus, it’s advisable that you buy personal insurance when the premiums are at a reasonable rate, and then keep it until you retire.

The policy will remain intact even if you change jobs or retire, which means that the insurance company cannot withhold or drop your policy unless of course, you stop paying the premiums.

Group term life insurance

If you are wondering how does group term life insurance work, then you must understand that they last while you are working. It is meant to provide financial support to your family in case of an accident. If you buy term plan provided by the employer, the policies do not require any medical verifications, and the premiums are relatively low. If you are covered with group term life insurance, you have the option to pay an additional premium if you want to include more benefits in the package.

Bajaj Allianz Extra Care Plus is one of the best term insurance plans available on Finserv MARKETS. They come with uniform plans as well as plans based on working grades. The former provides the same coverage across the board while the latter employs factors such as pay scale and hierarchy in employees. Some group term policies have options for covering outstanding car or house loans. They also have benefits for critical illness and disability.

Even though the best term insurance plans are economical at first, the costs increase with time, which means that your premium rates will increase as you further advance into the age group category. If you buy term plan, your coverage stops once you retire, and later on, it becomes expensive to buy a personal insurance plan considering various health and financial reasons that come with age and the dusk of career.

Which one should you get?


How Is Group Term Life Insurance Different from Personal Insurance?


Choosing whether to buy term plan or opt for group term life insurance is a choice which depends on various factors such as your individual needs and retirement and family plans, among others.

You should go for a personal life insurance policy if you are looking for a plan which is entirely owned by you and lasts you until lifetime. You should get personal insurance if you don’t want the death benefits to reduce with age and want the coverage to be extended to your children and grandchildren and can be continued even if you leave your company to join a new one.

On the other hand, group term life insurance is for those who only want the policy to last until their working years and don’t want to pay high premiums.

If you are still wondering how does group term life insurance work, then you should look at the Bajaj Allianz Extra Care Plus policies that are on Finserv MARKETS. They come with joint life coverage in a single policy which includes your spouse and guarantees you a supplementary income in case of loss of income due to unexpected illness or disability. Bajaj Allianz Extra Care Plus also comes with options of a pension plan which helps in leading a financially secured life even after you retire — a one stop to all your finance and insurance needs.


“Finserv MARKETS, from the house of Bajaj Finserv, is an exclusive online supermarket for all your personal and financial needs. We understand that every individual is different and thus when you plan to achieve your life goals or shop for the gadget of your dreams, we believe in helping you Make it Happen in a few simple clicks. Simple and fast loan application processes, seamless, hassle-free claim-settlements, no cost EMIs, 4 hours product delivery and numerous other benefits. Loans, Insurance, Investment and an exclusive EMI store, all under one roof – anytime, anywhere”!


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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