Are you new to Group Term Life Insurance? Know How to Save Money on a Term Plan.

Sep 19, 2019 | 1 month ago | Read Time: 3 minutes | By iKnowledge Team
Group Term Life Insurance

A Group Term Life Insurance is a term plan that offers life cover to a group of people. The plan not just covers employees and their family; employer-employee, banks, NGOs, financial institutions are also eligible for a group term life insurance. As a result, many individuals find it feasible to opt for a group term insurance as it is one of the best comprehensive term plans available.

In short, group term life insurance is an essential benefit provided by employers to the employees.

Group term life insurance policies are of different types. There are plans that have the basic features of a term plan. Employers may also choose a plan where the features differ depending upon the grades and position of the employees.

Some group term plans also cover an employee’s outstanding home loan, car loan. The insured’s family can easily repay loans in the unfortunate event of the policyholder’s death or permanent disability. For instance, Mahesh is an employee at ABC Inc. Mahesh, along with his team, has a group term life insurance with riders such as death benefits, accident and disability benefits, offered by his company. A year ago, Mahesh bought a house on a loan of INR 20 lakhs, for which he pays an EMI. Even if Mahesh suffers an accident where he is rendered disabled and unable to continue working, he doesn’t have to worry about loan repayment. His group term plan offers guaranteed pay-outs that takes care of his outstanding loans.

Features and Benefits of Group Insurance

  1. Employees get default term cover:

Employees can get this policy by simply being a part of the organisation that offers group term insurance. This reduces the need for unnecessary paperwork and formalities for individuals and the organisation. Many companies, themselves, pay premiums for group term policies offered to their employees.

  • Cover for High-risk Individuals:

In some cases, individuals who have a medical history of genetic illness or belong to a high-risk category can get a cover under this policy. This is because a group term life insurance’s coverage does not depend on an individual’s health condition. All members of the group are insured under one single policy. This comes as a relief for employees who find it difficult to buy term insurance. Employees don’t have to undergo a health-check up under this plan.

  • Customization of plans

Individuals can customise their group term plan based on their specific needs for a comprehensive coverage. They can opt for additional riders that provide critical illnesses, accidental death, education allowance, loan repayments etc. These additions only multiply the benefits provided by group term plans.

  • The Benefits of a Cost-effective Plan

Group term life insurance plans are more economical than individual plans. For example, the minimum number of employees that can be a part of a group term life insurance plan is 50. The administrative costs and paperwork of providing term insurance to the entire group are much less than an individual’s policy cost.

Insurance Plans come with tax benefits and, over a long period of time, help save money. By providing employees with group term plans, employers, as well as employees can avail tax benefits.

  • Ease of Premium Payment.

Organizations offering group term plans can choose the mode of premium payment. Companies can opt for monthly, quarterly, bi-annually or yearly time points to pay premiums.

Group term life insurance provides many benefits to employees including comprehensive protection and savings. For employers, issuing group term cover helps with employee retention by providing a cost-effective, employee-benefit plan.

Having a group insurance plan is always helpful. However, employees should also consider individual term plans to avail greater coverage and more features. To know about Aegon Life’s life insurance policies and other products like health insurance, visit our home page.


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