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What to know about employer-provided group term life insurance

Introduction 

Be frank and answer yourself. Will you join a company that offers group life insurance and other perks or the one that provides no other bonus other than salary? I believe the answer would be – the organization that offers insurance and additional benefits. 

If an organization gives insurance, they care for their assets. And, an employee can take advantage of the group life insurance, as it safeguards life for you and shall also act as a perk for their family. Because group life insurance guarantees death benefits, this lump sum will help them sail through the hard financial times in your absence. 

This blog shall help you in understanding, 

  • What is group term life insurance?
  • How does group term life insurance policy work?
  • What are the perks of group term life insurance?
  • What are the best group life insurance schemes available in India?

A group term life insurance is an essential component out of the many benefit packages one bags from an organization. Therefore, it is time to learn more about this beneficial mechanism. 

What is Group Term Life Insurance? 

Group term life insurance is insurance that the employer (organization) provides for their employees. It is collective life insurance that is affordable and provides coverage for a group of employees. A group life insurance policy will provide insurance coverage to a group of persons. 

Some of the features of this type of plan are as follows:

  • In a group term life insurance, one can add multiple policyholders at any time of the plan.
  • It guarantees death benefits. If the life insured meets with untimely death, the sum assured is paid to the nominee(s)/beneficiary.
  • It pampers the life insured with riders (add-on benefits at an affordable cost). They help you add some more features to your plan to act as a shield against critical illness, accidental fatalities, complete or total disabilities, and many more.
  • The group insurance has the capacity to hold over 50 policyholders.

How does a Group Life Insurance Plan Work? 

After understanding the definition of this type of plan, let us learn about the working of this insurance plan:

  • Under this type of insurance policy, a master policy is provided to a group administrator, who is liable at first to pay the first premium amount.
  • Under the first lap of premium payment, the administrator protects all members under the plan for 1 year. 
  • The policyholders in the plan have the liberty to select the sum assured. This sum can be a lump sum or linked to a salary account or a loan account.

Note: This type of insurance plan is renewed annually. Also, the deciding factors for premiums are based on the age and size bifurcation of the relevant age group.

Benefits of Group Term Life Insurance for an Employee

A group life insurance is a two-way train that comes with a win-win situation for both employee and employer. Let us begin with understanding the perks availed by the policyholder.

  • Automatic Insurance Cover: The employees are promised decent (based on the selected sum assured) financial assistance to their family if the life insured meets with unexpected death, tragic accident, or any other incident. 
  • Stress-free Medical Check-ups: The policyholder can leverage hassle-free medical tests till their free cover limitations are exhausted.
  • Tax Benefits: The death benefits are tax-deductible under Section 10 (10D) of the Income Tax Act (1961).
  • Riders: It is a list of benefits that comes at a pocket-friendly price. By adding these to the group life insurance, it can help you in several conditions such as – critical illness, accidents, total and permanent disability, and many more.

Benefits of Group Term Life Insurance for an Employer

  • Gratuity: As mentioned earlier, this type of insurance is a dual-way profitable train. Employers profit from group term life insurance just as much as employees do. Here, they can easily cover their gratuity payment. Gratuity funds are carefully constructed to meet future gratuity payments, lowering the load on the employer.
  • The performance of the returns on the invested funds is influenced by the fund type selected by the user.
  • Cost-Effectiveness: Group term life insurance policies are less expensive and affordable than individual insurance plans in India.
  • If the funds invested by the employee works well, then it lowers the employer’s costs.

Best ABSLI Group Life Insurance 

After understanding the basic definition, features, and benefits, let us get down to see through some of the best available group term life insurance in the Aditya Birla Sun Life Insurance World. 

Some of the gems are as follows:

Aditya Birla Sun Life Insurance Group Protection Solutions 

This compelling plan by the ABSLI acts as a seal of the deal for the employees as it comes with a set of attractive perks. Apart from providing a death benefit to the life insured’s family, it also covers other risks such as – accidental death, disability, critical and terminal disease.

List of perks that this plan permits are as follows:

  • Death benefit: As per this benefit under this plan, if the life insured meets with an untimely death when the plan is active, the death benefit shall be paid to the family. 
  • Choose your advantage: The life insured (employee) has the liberty to choose between the increasing cover and level cover. 
  • Individual Conversion Option: If the policyholder surrenders the policy, they have the opportunity to continue the plan as individual insurance.

Riders: They are additional benefits that you can vouch for to your existing plan to make it more secure at a basic price.

  1. Accidental Death Rider 
  2. Critical Illness Rider Benefit
  3. Critical Illness Plus Rider Benefit
  4. Critical Illness Premier Rider 
  5. Accidental Death and Dismemberment Rider
  6. Term Rider
  7. Total & Permanent Disability Rider
  8. Accelerated Critical Illness Premier Rider 

To know more about this plan, click – ABSLI Group Protection Solutions.

Aditya Birla Sun Life Insurance Group Income Replacement Plan 

This plan is also somewhat similar to the prior ABSLI plan. Still, this plan has another beneficial feature, and it is that it replaces the policyholder’s monthly payments to ensure basic requirements are covered in times of crisis.

Features and perks included in this plan are,

  • Income Benefit: This feature can be availed only when the life insured is diagnosed with any specified Critical Illnesses or Total Permanent Disability under the plan. You are eligible if it is diagnosed for the first time.
  • Member Addition: You have the liberty to new members either by paying a pro-rata premium to balance out the remaining policy year’s coverage or paying the entire premium for one full year towards the beginning of the new members joining date, as per the scheme rules.
  • Optional premium payment methods: Premiums can be paid – monthly, annual, semi-annual, or quarterly.
  • Increase or decrease in sum assured: As per this feature, the plan administrator has the freedom to increase or decrease the coverage amount of the other fellow policyholders for the year. 

To know more about this adequate group life insurance, click – ABSLI Group Income Replacement Plan.

Conclusion

A group insurance plan is an asset that offers an effective point for the employee to weave a safety net for themselves and their family. 

Therefore, every employee should be vigilant enough about the group life insurance they are offering because none would want to compromise on the perks they shall receive, especially when their family is covered in it. 

Make the right choice with the right insurance partner.

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