Taking an insurance plan has become an essential part of planning a better health and financial future. People buy insurance policies in order to protect themselves as well as their family's future. Among the several choices available in the market to choose from, the Group Term Life insurance policy is quite a practical option. So let’s understand what a Group Term Life insurance policy is all about.
A group term life insurance is a plan that covers as many people as possible under a single policyholder's name who is essentially the group administrator. It primarily upholds a contractual relationship between an employer and the insurance company and is generally taken up by most big-sized companies for their employees. The group administrator decides the sum insured and accordingly the premium is calculated. In this type of policy, the insurance company is responsible for paying your policy benefits to your immediate family in case of an unfortunate event of your death.
Following are the several key features of group term life insurance making it a lucrative choice for an employee’s package:
1. The company or group administrator can add any number of members at any point in time.
2. In the unfortunate event of death of the insured, a sum is paid to the beneficiary or the immediate family members.
3. Certain advantages like riders are made available in the case of accidental deaths, major illness, etc.
4. With a group size of a minimum of 50 members, the application process is quite simple and easy to do.
5. It is definitely a cheaper choice when compared to an individual policy cover.
6. As a part of the compensation package, terminal illnesses are included in the policy.
Following are some of the benefits of a group term insurance plan to employers:
1. A systematic method is used for employers to build up funds to cover future gratuity obligations to their employees. Employers can receive group insurance policies that provide life insurance coverage to their employees, while at the same time providing ease of administration for the employer.
2. As Group Term Life Insurance covers many people at a time, the premiums paid by employers are much lower too as compared to an individual policy.
3. Based on the performance of the funds, the employer can earn lucrative returns further decreasing their expenses.
4. Another benefit to the employer is that some plans offer both life insurance coverage as well as gratuity aids.
Employees enjoy a lot of benefits from a group term life insurance plan as discussed below:
1. Having a group term life insurance would mean that employees are assured of financial assistance for themselves as well as their entire family in case of any unfortunate case like death, serious illness, etc.
2. Employees can do away without any medical examination. Everyone that is included in the plan is automatically a part of the policy from the moment they join.
3. A group term life insurance is generally cheaper as compared to individual plans.
4. The main advantage is that the plan offers financial security to the entire family and ensures their financial interest.
5. The premiums are directly debited from an employee's salary, so they need not worry about keeping a monthly check on the premium calculations and payments.
6. The policy offers easy and minimal paperwork and can be modified as per the employee's requirement.
1. Pre-existing medical conditions are not covered.
2. Taking part in dangerous activities like racing, diving, martial arts, mountaineering can harm the insured individual.
3. Use of alcohol, drugs, narcotics, and other harmful substances without being prescribed by any medical practitioner.
4. Any criminal activities attempted by the insured.
5. Any activities like attempting suicide or any other self-inflicting injuries are excluded.
6. If the insured suffers from any terminal illness such as AIDS, Cancer- that is excluded from the policy.
7. Participating in any naval, army, or air force activities cannot be included in the group term life insurance policy cover.
8. Any unfortunate acts like wars, airstrikes, riots, or civil unrest are excluded.
1. The first step is to register your claim online by filling in the required details about the patient and hospital.
2. Next step requires the policyholder to upload all the requested original documents.
3. In the next step, the insurance company will assess the claim details.
4. Lastly, after careful assessment of the information provided, the insurance company will share their decision.
In addition to providing you with the highest degree of financial security of them all, life insurance serves as a safety net for the future of your family. It safeguards your financial wellbeing by granting adequate protection from the unexpected. Undoubtedly, a group insurance policy is a smarter way to aim for insurance protection against multiple risk aspects as well as life.
You are required to be at least 18 years of age.
While the minimum age is 18 years, the maximum age to enroll in a group life insurance plan ranges from 65 to 69 years.
The duration is usually for a period of one year after which it must be renewed annually.
As per section 10 (10D) of the Income Tax Act, insurance payments made to the beneficiaries are exempted from any taxation.
As the employees are a part of the organisation, they receive a complimentary group term insurance plan and the premiums are a part of the compensation package.