Employee Benefits
Group Term Life Insurance
Group Term Life Insurance is a life insurance policy that provides financial protection to a group of individuals, typically employees of a company, members of an association, or a professional group. It offers a fixed sum assured to the nominee in case of the insured member’s death during the policy term. This policy is usually purchased by employers or organizations as a benefit for their members.
Why Group Term Life Insurance is Essential?
- Financial Security for Employees & Their Families – Provides a safety net in case of unexpected death.
- Cost-Effective Coverage – More affordable than individual life insurance policies.
- Employee Retention & Job Satisfaction – A valuable benefit that enhances employee loyalty.
- No Medical Underwriting for Basic Coverage – Employees are covered without medical tests.
- Customizable Benefits – Coverage can be enhanced with riders like accidental death benefits, disability benefits, and critical illness cover.
Important Things You Should Note
- Coverage is typically for the duration of employment and ceases once an employee leaves the company.
- Premiums are lower as risk is spread across the entire group.
- Employers may pay full premiums or share costs with employees.
- Sum assured is usually linked to the employee’s salary (e.g., a multiple of annual income).
- Additional riders can be added for extra protection against accidental death, disability, or critical illness.
What is Covered & What is Not Covered?
Covered
- Death due to natural or accidental causes (within policy terms).
- Customizable sum assured based on company policy.
- Coverage during employment (as long as the policy is active).
- Optional riders like accidental death, critical illness, or disability cover.
- Tax benefits for employers under applicable tax laws.
Not Covered
- Death due to suicide within the first year of coverage.
- Pre-existing conditions (depending on policy terms).
- Death due to participation in hazardous activities (e.g., extreme sports, war, illegal acts).
- Coverage lapses if employment is terminated.
- Claims outside the policy term.
Frequently Asked Questions (FAQs)
Who is eligible for Group Term Life Insurance?
Employees of an organization, members of professional groups, trade unions, and associations can be covered under this policy.
Does Group Term Life Insurance cover accidental death?
Yes, most policies cover accidental death, but additional benefits can be added with riders.
Can employees continue the policy after leaving the company?
No, the policy is linked to employment. However, some insurers offer an option to convert it into an individual policy.
How is the premium for Group Term Life Insurance determined?
Premiums depend on factors such as the size of the group, average age of members, coverage amount, and risk profile.
Is medical testing required for coverage?
Usually, no medical tests are required for basic coverage, but higher sums assured may require health declarations or check-ups.
