GROUP TERM LIFE INSURANCE

A Group Term Life Insurance Policy provides Insurance against Death to all the Insured People that are part of the group. It provides reimbursement to the Insured Person’s Nominee as per the chosen Sum Insured in case of Insured Person’s Death

• Employer

  Employers commonly purchase a Group Term Life Insurance Policy for their employees. It helps attract new talent as well as retain existing employees. Employer-Employee relationship is a must to qualify as a part of this Group Policy.

• Affinity Group

  Any Registered Group can buy a Group Term Life Insurance Policy as long as the group was not formed for the sole purpose of purchasing a Group Term Life Insurance Policy. Here there is no Employer-Employee relationship.

• A Group Term Life Policy provides reimbursement to the Nominee in case of an Insured Person’s Death. The Compensation from the Group Term Life Insurance Policy allows the Insured Person’s family members to accomplish their goals such as Children’s Education Expenses or Marriage Expenses, Medical Expenses in case of an Emergency etc.
• The Employer has the option to choose different Sum Insureds for different employees based on their Designation or Salary or Number of Years in Service or any other criteria that they internally deem appropriate for fair coverage for every member of the Group.
• The Employer can also add or remove members actively to this Policy. Employees leaving the organisation in the middle of the year can be removed and Pro-Rata Premium is refunded while employees joining the Company can be also added to the Policy on payment of Pro-Rata Premium.
• An organisation has frequent reviews and hence hikes or promotions can be given in the middle of the year. With this Policy, there is no need to wait till the end of the year to increase the Sum Insured of a Person that just got promoted. You can easily increase the Sum Insured during the Term of the Current Policy itself.

• Free Cover Limit in Group Term Life Insurance:

  This is a Limit on the Sum Insured below which there is no need to undergo any Medical Tests or submit any Medical Questionnaire irrespective of the age. This is exceptionally important because Individual Term Life Cover is extended only after Medical Underwriting. This Limit depends on the Sum Assured and Group Size.
• Single Start Date for the Policy makes it easier for the Company to manage Policy Renewal.
• Purchasing a Group Term Life Plan is a cheaper option compared to purchasing an equivalent number of Individual Term Life Insurances.

In addition to providing a Cover for the Death of the Insured Employees, a Group Term Life Insurance Policy offers the following Riders:

• Accidental Death Benefit:

  If the Group Term Life Insurance Policy has an Accidental Death Benefit Rider, the Nominee would receive the Sum Assured under this Rider in the event that the Insured Person dies of an Accident.

• Total Permanent Disability Rider:

  If the Group Term Life Insurance Policy has a Total Permanent Disability Rider, then the Insured Person would receive the Rider Sum Insured in case he/she suffers from Total Permanent Disablement on account of an Accident.

• Partial Permanent Disability Rider:

  If the Group Term Life Insurance Policy has a Partial Permanent Disability Rider, then the Insured Person would receive the Sum Insured chosen as per the Partial Permananent Disability Rider in case he/she suffers from Partial Permanent Disablement on account of an Accident.

• Critical Illness Rider:

  A Group Term Life Policy with a Critical Illness Rider will pay the Sum Insured under this Rider, in one lumpsum payment, if the Insured Employee suffers from a Specified Critical Illness. These Critical Illnesses can be Cancers of Specified Severity, Heart Bypass Surgery, Kidney Failure Requiring Regular Dialysis and much more.

These Riders are provided in a Group Term Life Policy on payment of Additional Premium.

A Group Term Life Insurance Policy offers the following Tax Benefits for the Employer and Employee:

• The Employer or Insured that pays the Premium for this Policy can use this as a Tax-Deductible Business Expense.
• Death Benefits paid to the Beneficiary of the Employee are also Tax-Exempt.

What is the minimum number of employees needed for a Group Term Insurance Plan?