Group Term Insurance Plans

Who is Eligible for Group Term Life Insurance Policies?

Group term life insurance policies are offered to the following sections of people-

1. Employer-employee groups
2. Non employer- employee groups
3. Banks
4. Professional groups
5. Non-banking financial institutions
6. Microfinance institutions

There are many varieties of group term life insurance policies.

Following are some examples-

1. Some plans may offer uniform covers to all of its members
2. Some plans offer ranked covers for various grades of members
3. Some schemes provide cover for outstanding housing loans, car loans, etc.
4. Some schemes have riders like critical illness benefits, accident benefits, disability benefits, etc.

What is the Nature of a Group Term Life Insurance Policy?

Following is the nature of a group life insurance plan-

1. It is awarded to all members of a certain group contingent on certain basic conditions of insurability
2. Medical reports need not be produced
3. Maturity value is not provided
4. Scheme covers death

General Features of Various Group Insurance Schemes

Premium: Premium on group term insurance can be paid entirely by the employer.

Members under the scheme are also allowed to make contributions towards the premium of the scheme.

Double Accident benefits:- For an extra premium, double accident benefit is provided to the insured in the event of an accident.

This comes excluding the permanent disability benefit.

How does a Group Life Insurance Plan Work?

Following is the flowchart group life insurance plan-

1. A group administrator is issued a master policy upon which he pays an initial premium.
2. This initial payment covers all the members of the group for a tenure of one year.
3. An option to choose the sum assured is provided to the members of the group. This sum can either be a lump sum amount or could be linked to a salary account or a loan account, etc.
4. Once the policy holder has paid the premium, the members are covered for a tenure of one year from the date of commencement of the policy.
5. The group life insurance plans are annually renewable.
6. The premium is charged based on the alterations in the size and age allocation of the concerned age group.

What Are the Benefits of Group Term Life Insurance Schemes to Employers?

1. Group term life insurance policies are beneficial to employers just as much as they benefit employees.
2. Employers are aided in funding their gratuity liability with ease under the group term life insurance policies. Gratuity funds are built strategically to fulfil subsequent gratuity payments, thus, reducing the burden on the employer.
3. Returns on the funds will be earned according to the performance of the funds chosen by the client.
4. Group term life insurance policies in India are more economical because administering schemes on group basis has a lower cost.
5. Funds that perform better will earn increased returns consequently decreasing the expense to the employer.
6. Some plans offer employers with both life insurance covers along with gratuity benefits.

What Are the Benefits of a Group Term Insurance Plan to Employees?

Following are the benefits of a group term insurance plan to employees-

1. Employees are assured of financial assistance being extended to their families in the unfortunate event of their demise, critical illness, etc.
2. Employees can benefit from the inconvenience of medical tests be done away with until their free cover limits.
3. The premiums paid by their employers are not treated as perquisites.
4. Employees can enjoy death benefits that are exempt from tax under Section 10(10D)
5. Easy administration by way of simple documentation
6. Can be customised to meet niche needs of the employees enrolled
7. Offers security to the family of the insured
8. Safeguards the insured's financial interest

Features of Group Term Life Insurance Plans

Group term life insurance schemes have a lot of attractive features which make them ideal for employee benefit packages. Following are few of the many features of group life insurance schemes-

1. Members can be added at any point of the year
2. A pre decided sum assured is paid to the beneficiary of the insured in the event of death
3. Add on covers are provided as riders that insure for critical illnesses, accidental deaths, disabilities, etc.
4. Application process is quick and easy
5. The minimum size of the group is 50 members
6. Terminal illness is provided as a built-in benefit
7. Cheaper than individual policy cover
8. Employees can enjoy the benefits they are entitled to while maintaining a healthy and strong connect with the employers

Best Group Term Insurance Plans in India

The following are some of the best group term insurance plans in India:

ICICI Pru Group Term Plus

ICICI Pru Group Term Plus plan is an insurance which offers life cover benefits to a group of people. This means the plans not only provide financial coverage to formal (employer - employee) but also informal (non-employer - employee). The groups include non-banking financial institutions, micro-finance institutions, banks, and other professional groups.

HDFC Life Group Term Insurance Plan

1. HDFC Life Group Term Insurance offers life cover to the groups of people.
2. The plan can be renewed annually.
3. This is master policy which provides financial coverage to all the members of the group.
4. Employees can also add additional riders like critical illness/ accidental/ disability.

Future Generali Group Term Life Insurance Plan

1.  Future Generali Group Term Life Insurance Plan offers complete insurance coverage to all the members of a group under a single plan.

1. The policyholder gets an option to add or delete members. The minimum group size of this plan is of 25 people.
2. The minimum sum assured to social groups with at least 5,000 members is Rs.5,000 per member.

1. The policy should renewed every year.

1. The policyholder will also get tax benefit on purchasing this plan.

IndiaFirst Group Term Life Insurance Plan

The IndiaFirst Group Term Life Insurance Plan helps in protecting all the members of the group from any sort of financial uncertainty with affordable premiums.

1.  The groups should have at least 50 members.
2. The plan provides the policy coverage of Rs.5,000 per member.
3. The policyholder can link the insurance policy to EDLI plans.
4.  It provides tax benefits to the policyholders.

TATA AIA Life Insurance Group Term Life Plan

TATA AIA Life Insurance Group Term Life plan provides financial coverage to the policyholder’s family members even after the death of the policyholder.

1. The plan offers complete life coverage to all the group members.
2. The minimum and maximum age of purchasing the policy is 14 years and 84 years, respectively.
3. The minimum sum assured offered to the group members is Rs.5,000.