Group term insurance is a special kind of life insurance program designed for a group of individuals instead of one individual owner. It is, essentially, an annual contract between a group of people and the insurance provider that gives coverage to each insured party mentioned in the contract. These plans could be designed for groups such as multinational companies, government agencies, school administrators, etc.
If you are in the market looking for a group term life insurance but unsure about the value it brings to your company, then look no further! This article provides a comprehensive guide on the benefits of Group Term Life Insurance plans.
Advantages of Group Term Insurance Plans to Employers
Employees are the backbone of any sizable and growing business. Their service to the organisation is what helps it gain a foothold. While most businesses provide more or less than adequate pay packages to their employees, a lack of sufficient life insurance policy coverage endangers the well-being of their family members in case anything untoward happens to that concerned employee. Group term life insurance is construed as an ideal solution for both employers and employees. Here is a list of benefits group term life insurance brings to the company:
- Insurance Coverage
When it comes to the well-being of your staff and employees, you cannot afford to take any risks. While you cannot foresee all possible dangers and accidents, you can provide a safety net that protects your staff if something unfortunate occurs. Group insurance plans are relatively cheap and are designed to cover members at all stages of their lives. Therefore, it is a no-brainer for companies who want to ensure security for their employees and build a more resilient community.
- Gratuity Fund
Group insurance is beneficial for both parties — employers and employees. Employers can provide cheaper benefits to their employees while enjoying lower administrative costs. Employers are assisted with a methodical technique of accumulating cash for future gratuity responsibility to their staff. A group term life insurance plan helps companies with this and gives much needed and appreciated life insurance coverage to employees with more convenience.
- Tax Advantages
Group insurance programmes are designed to help the employer, including tax breakers. Employers and workers both can profit from group life insurance programmes. Death payments are free from taxation under Income Tax Act Section 10(10D). Furthermore, group insurance programmes are effective in employee welfare, and it helps the organisation attract, retain and increase the staff’s productivity.
- Customisable Coverage
The base group insurance policy, might not be enough, especially if your organisation grows larger than more and more individuals are added to your payroll. That’s why add-ons can be such a good idea– they can cover various aspects of the employer-employee relationship. Group life insurance coverage can be supplemented by add-ons such as education allowances, repatriation allowances, and other benefits, therefore providing a wide range of benefits in addition to the base coverage.
- No Medical Check-up is Needed
When your employees are insured under Group Term Plans, they can skip their medical check-ups — making them less preoccupied with insurance burdens and more focused on business. With medical check-ups off their minds, your employees can devote more time to thinking about how to increase sales volume. It also significantly increases the insurance processing speed.
- Affordable Coverage
A group term insurance plan offers comprehensive benefits that can be availed at a much lower cost. As the word suggests, a group insurance policy is meant for a group of people who avail of the same insurance policy and pay the premiums collectively, as a group. For instance, all employees of an organisation or members of a society can be included in one group policy with the employer/society paying for their insurance. All risks can be covered under one roof. Hence, every eligible person will come under one policy, making it affordable.
Pointers to Note
Here are some pointers you need to understand before applying for a Group Insurance for your business:
- Term Life Insurance coverage is granted to all individuals of a specified group subject to certain fundamental insurability standards.
- Medical reports and Digital Health ID cards are not required for a group insurance claim.
- Group Insurance does not cover maternity. However, some plans can offer coverage as an add-on.
- The death benefit is provided to the beneficiary or beneficiaries listed in the policy document in case of unfortunate death of any policyholder under the group insurance coverage.
Group term insurance is a comparatively cheap way for any company to offer a valuable service to employees. It’s a plan that almost every employee will find useful in some form or another, and it can provide peace of mind for both the employee and their family members. It also has the potential to drive your business forward, delivering productivity gains from happier workers and providing you with an easy-to-calculate return on investment. What’s more, buying group life insurance could even be one of the most cost-effective business decisions.