The ever-rising rates of inflation, transforming lifestyles and growing cases of critical illnesses has made human life very unpredictable. One unfortunate event can change the course of your life and your family overnight. In such a scenario, all your life savings may not be enough to cover the crisis at hand, thus affecting your future goals. You will always want to ensure that your loved ones do not face any financial hardships due to such unfortunate events in life. This is where a Group Term Life Insurance plan (a type of term insurance plan) provides the perfect financial backup to ensure complete financial protection of your loved ones.
As the name implies, Group Term Life Insurance Plan offers life insurance to a group of people under a single policy. This plan provides financial assistance and independence to the insured individual's/employee's beneficiaries. Group term life insurance is relatively inexpensive compared to individual life insurance. Therefore, participation is also quite high. It also comes with myriad term insurance benefits, making the plan an ideal fit for your needs. A group term insurance is one of the employee benefits offered by companies to their employees. Under this group term insurance policy, a lump sum death benefit is paid to the insured's family in the unfortunate event of his death.
The policy works in the following way:
A master policy is first issued to the employer/an eligible individual from the community.
The employer (master policyholder) pays the initial premium to initiate the group term plan. This initial premium amount paid by the employer covers all the members in the group for one year.
Next, the suitable group members can opt to choose the coverage.
Further, to improve/enhance the basic coverage of the group insurance policy, the members need to pay the additional premiums themselves.
The group term life insurance plans have to be renewed annually by the employer ( master policy holder) by paying the premiums for the members to enjoy the benefits of the group term insurance policy.
Group Term Life Insurance plan offers insurance coverage of about Rs. 1 Crore, which can provide financial assurance to your family in your absence.
A unique Group Insurance plan that offers high life insurance coverage of up to Rs. 1 Crore without the need to undergo any medical examination.
You can enhance your protection and customize your Group Insurance plan with an add-on cover for Critical Illnesses like Cancer, Kidney failure, Heart Attack, etc. with coverage of up to Rs. 10 Lakh.
A Group Term Insurance plan is an extremely cost-effective option for any individual as the premiums are significantly low in comparison to that of individual term insurance plans.
As per the prevailing tax laws, the premium paid towards a Group Term Life Insurance plan is exempt from taxes under the IT Act Section 80C.
The key features of a group term insurance plan are:
The minimum size of the group is 50 members, and members can be added at any point of the year
The application process is quick and easy
Group term life policy is more affordable than individual policy cover
The premium amount on a group term life insurance policy is usually paid by the employer. However, the members included under this scheme can also choose to contribute towards the premium and must contribute an additional amount to add their family members to the group.
With an extra premium, you can get the double-accident benefit, which covers you against an accident.
As riders, the add-on covers insure against accidental deaths, critical illnesses, disabilities etc.
Group term insurance policies help the employers in funding their gratuity liability.
As schemes are administered on a group basis, the premium is low.
Double benefits both life insurance covers and gratuity benefits can be availed with a few policies.
Financial assistance and security in case of the employee’s death are provided to their family. Further, this scheme works in case of the employee’s critical illness.
Income tax exemptions by the employees’ families on the death benefits.
The policy can be customised as per the needs of the employees.
A group term life insurance policy covers:
Addition of suitable/ eligible members at any time of the year.
The sum assured amount is paid to the beneficiaries in case of the unfortunate death of the insured.
Add-on covers allow the enhancement of the scope of the policy with the additional premiums on the opted benefits.
Group Term Life Insurance policy does not cover:
Attempted suicide, intentionally self-inflicted injury within one year from the date of commencement of membership. A ninety (90) days waiting period applies to critical illness from the policy's commencement date.
On committing or attempting a criminal act.
Infected with AIDS/ AIDS-related illness/ HIV infection.
Alcohol/ solvent abuse/ taking of drugs, unless taken under a registered medical practitioner's lawful directions and prescription.
In case of war, invasion, mutiny, riot/ civil commotion, strikes etc.
Participating in any military, naval, or air force operations during peace-time
Participating in racing, driving, diving or any race. Also in martial arts, hunting, mountaineering, parachuting, bungee-jumping etc.
Any Pre-existing medical condition.
The filing of a claim is relatively easy and can be done by just following these steps:
Life insurance is a must for individuals with financial dependents. A group term life insurance policy is a type of term life insurance wherein the insurance coverage is provided to a group of people. You can avail of a group term insurance plan and thereby safeguard the future of your loved ones as they will receive financial assistance and security in the form of a death benefit in case something tragic happens to you.
It is a single life insurance policy that covers a group of people.
The minimum age to enrol into a group term life insurance plan is 18 years, and the maximum age is 69.
A Group Term Life Insurance is very beneficial as it not only provides a lump sum benefit amount in case of the death of an insured, but the premium amount under a group plan is quite affordable.
Group Term Life Insurance policy is issued for one year and is renewed every year.
Life insurance cover is offered at subsidised premiums. Individuals unable to get insured under an individual term life insurance policy can get a life cover as part of the group. Also, no medical examination is required even for a higher sum assured.