Group Term Insurance
Group Term Insurance
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Group Term Insurance

Group Term Insurance policy refers to the insurance coverage that is provided by the company to a group of people employed in that company. Group term insurance coverage schemes offer economic independence to the worried employee’s family in the event of the unfortunate demise of the employee. It's intended to offer financial assurance to the beneficiary under the Group term insurance plan in the case of the death of the individual working in an organisation.

Group term insurance plans have become an essential constituent in applications offered to personnel by employers. In fact, most fraternal carriers provide group term insurance to its participants.

Be Responsible Enough: Secure your employees with the best group term insurance plan. Compare multiple plans from various insurance companies with PolicyX and opt for the one as per your essentials

A Helping Hand for Personnel: Group term insurance plans have become an essential constituent in applications offered to personnel by employers. All the companies should provide group term insurance to its management for a safe future.

Beat the Ifs’ With Right Insurance Plan: Group Term Insurance is a crucial product for working men and women who've monetary dependents in their homes which makes it necessary to be a part of this insurance plan so as to build support in case of any mishap.

Importance of Group Term Insurance

Group Term Insurance Policy is meant to offer financial support to the family of an employee in the event of the miserable death of the employee in an uncertain incident. This single insurance policy covers all the employees of an organisation and is provided to the employed working staff by the company itself.

This special coverage is crucial to cover the family of the workforce in the absence of the wage earner of the family. Add on covers are supplied as riders that insure for vital illnesses, accidental deaths, disabilities, and so forth. As a responsible employer of an organisation, it is vital to provide safety and security to the employees in every sense. Insure your workforce with the best group term insurance plan

Who Can Purchase Group Term Insurance?

Group term insurance policies are available for the following subsequent sections

  • Agency-employee businesses
  • Non-Corporation employee business
  • Banks
  • Professional Groups
  • Non-banking economic establishments
  • Microfinance establishments

Features of a Group Term Insurance

  • It is provided to all individuals of a certain group contingent or employees on certain fundamental conditions of insurability.
  • Maturity cost is not provided.
  • The scheme primarily covers death.
  • The premium on group term insurance can be paid totally by the business enterprise.
  • Members under the scheme are allowed to contribute to the premiums of the scheme for additional benefits.
  • In exchange for an extra premium, double accident advantage can be taken in the case of an accident.

Group term insurance schemes have a whole lot of attractive features that cause them to best for worker gain programs. Following are a few of the numerous capabilities of group coverage schemes:

  • Individuals can be introduced in between the year at any time.
  • A pre-decided sum assured is paid to the beneficiary of the insured in the case of death.
  • The application process is short and easy.
  • The minimum size of the group is 50 members.
  • Terminal contamination is provided as an integrated advantage.
  • Employees can revel in the benefits they may be entitled to even as retaining a wholesome and a strong connection with the employers.

Benefits Of Group Term Insurance

Benefits to Employers

  • Group term life insurance rules are beneficial to employers simply as a good deal as they gain more manpower in the company which directly increases the profit.
  • Employers have aided in investment their gratuity legal responsibility without difficulty under the group term life insurance guidelines. The gratuity budget is constructed strategically to fulfil subsequent gratuity bills, hence, lowering the load at the business enterprise.
  • Returns on the finances might be earned in line with the performance of the budget chosen by means of the patron.
  • Group Term insurance policies in India are greater cost-effective because administering schemes for a group has decreased prices.
  • Finances that carry out higher will earn elevated returns, therefore, reducing the cost to the enterprise.
  • Some plans offer employers with both life insurance covers at the side of gratuity blessings.

Benefits to Employees

  • Employees are assured of monetary assistance being extended to their households in the unfortunate occasion of death, crucial contamination, etc.
  • A person can benefit from the inconvenience of medical tests be executed away with till their unfastened cover limits.
  • The rates paid by their employers are not treated as perquisites.
  • A person can experience tax benefits under section 10(10D) of the Income Tax Act of India, 1961.
  • Clean management by using a manner of easy documentation.
  • May be customized to fulfil niche wishes of the employees enrolled.
  • Offers safety to the family of the insured.
  • Safeguards the insured’s monetary interest.

Add-On Covers

All about Group Personal Accident Insurance for your workforce, here are some listed points to remember before purchasing the policy:

  • Some plans may provide uniform covers to all of its contributors.
  • A few plans provide ranked covers for various grades of individuals.
  • Some schemes offer cover for high-quality housing loans, automobile loans, and many others.
  • A few schemes have riders like important contamination advantages, accident advantages, incapacity benefits, etc.

How Does a Group Term Insurance Plan Work?

Following is a flowchart of the group term insurance plan:

  • A set administrator has issued a grasp coverage upon which he will pay a preliminary premium.
  • This preliminary bill covers all the contributors of the Group for a tenure of one year.
  • A choice to select the sum assured is furnished to the individuals of the group. This sum can both be a lump sum quantity or could be related to an earnings account or a mortgage account, and so on.
  • As soon as the policyholder has paid the premium, the contributors are covered for a tenure of 365 days from the date of commencement of the coverage.
  • The group term insurance plans are annually renewable.
  • The premium is charged based on the changes in the length and age allocation of the involved age Group.

Point To Remember Before Buying Group Term Insurance

Provide security to your employees and be a trusted organisation. The following are some points to remember prior to buying a Group Term Insurance Policy:

  • You will be required to make a research of all the plans of the policy provided by different companies to you.
  • By checking the features and benefits of the plans, do a comparative study and choose according to your needs.
  • Keep a check whether the policy meets the requirements of the employee’s family in the case where the respective employees due to any unfortunate event.
  • Remember the primary need is to cover the family of the employee in the absence of the breadwinner of the family.
  • The basic amount of the coverage is generally equal to the annual salary of the employee for 1 year.
  • In the case, if the employee needs add-on coverage, the extra premium amount will be paid and deducted by the employee’s account.
  • Coverage for death due to any disease or illness will not be provided.
  • Tax benefits under the policy are applicable under section 10(10D).

Why Compare Group Term Insurance With PolicyX?

Running a business and own an organisation, protect your employees future with group term insurance plan but confused in choosing the right plan. PolicyX comes as a comparison portal for all your insurance needs.

  • Look at all the plans offered by various insurance providers and make a comparison in very few simple steps by sitting at home.
  • Choose the right plan to secure your workforce and their families in times of need.
  • No need to worry about which plan to choose, contact PolicyX customer care support for a better experience in selecting the right insurance.
  • Comparison always makes the process of choosing simple, but PolicyX does it in a hassle-free way only for you.
  • Availability of free quotes within a few clicks is what Policy provides you to cover your employees with the best plan.

Additional Deliberations of Group Term Insurance

Often, companies provide special consideration to their employees who are terminated a choice to modify the insurance policy into a personal term or life insurance plan. As the plan remains active till the employee gets terminated or till the end of the policy term period.

Generally, the premiums for personal policy is higher than the group policy. That is why most of the people refuse for the conversion of plan. But instead, only a few of the companies also offer the employees to pursue the group insurance policy for a prolonged time or permanently.


1. What is the minimum age for enrolling in a group term insurance plan?

The minimum age for enrolling in a group term life insurance plan is 18 years of age.

2. What is the maximum age to enrol in a group term life coverage plan?

The maximum age to enrol in a group life coverage plan is 69 years.

The maximum age at the time of expiry of the coverage is 70 years.

3. Is there any cash value for group term life insurance?

No, Group Term Insurance do not have any cash value; but, the annual premiums are generally less than the insurance with cash values.

4. What will happen if the employee is not dead?

If the employee survives the term insurance, the benefit amount will be waived off. The premiums from employees who are not dead while their policies are active finally the insurance company help the families who really need the benefit of the insurance for survival.

5. What are the disadvantages of group term insurance?

The employee has less or no control on their individual cover. On leaving the job the insurance will not continue. Healthy employees also have to pay the same premium amount in comparison to the employees who are more prone to risks in the group policy.

Last updated on 11-11-2020