One-stop destination for all your online insurance and financial needs!

Group Term Life Insurance

A group term life insurance policy, as the name suggests, offers life insurance coverage to an entire group of people under a single policy. Generally, the policyholder of a group life insurance is the employer and the policy provides coverage to its employees. In addition to corporates, the policy can also be purchased by NBFCs, NGOs, microfinance institutions, and other professional groups.  Since a group term insurance plan is taken for a certain number of people together,  it is available at a comparatively lower premium cost.

In addition to the death benefit, some group term plans also compensate for the outstanding loans, critical illness and total/partial disabilities.

Group Term Life Insurance- Features & Benefits

A group term insurance policy comes loaded with some of the following features:

  • Provides life insurance cover to all the insured members of the group
  • Easy enrolment with no documentation
  • Protection against unforeseen circumstances of death
  • Optional rider benefits are available
  • Worldwide coverage option
  • Easily convertible to individual plan once the employee leaves the organization
  • Easy customization
  • Tax exemption benefits
  • Quick claim settlement process

Checkout Some of the Group Term Life Insurance Providers in India

Here are some of the group life insurance companies in India that offer some of the best and comprehensive Group life insurance plans:

Group Term Insurance

Min Entry Age

Max Entry Age

Maturity Age

Policy Term

Bajaj Allianz Group Term Life Insurance Plan

14 years for both Employer-Employee groups (EE) & Non-Employer Employee groups (NEE)

79 years for EE (for an active employee) & 69 years for NEE

80 years for EE (for an active employee) & 70 years for NEE

1-Year (Renewable Every Year)

Tata AIG Group Term Life Insurance Policy

14 years

84 years

85 years

1-Year (Renewable Every Year)

Reliance Group Term Assurance Plan

18 years as of last birthday

59 years as of last birthday

60 years as of last birthday

1-Year (Renewable Every Year)

Max Life Group Term Life Insurance Plans

18 years

80 years for the death benefit

Depending on the plan variant

1-Year (Renewable Every Year)

Bharti AXA Group Term Life Insurance Policy

18 years

69 years

70 years

1-Year

Edelweiss Tokio Life Zindagi Unlimited

16 years

80 years

81 years

1-Year (Renewable Every Year)

ICICI Pru Term Plus

15 years

79 years

-

-

PNB MetLife Group life insurance plan

18 years for EE (for an active employee) & 15 years for NEE

80 years for EE (for an active employee) & 60 years for NEE

81 years for EE (for an active employee) & 61 years for NEE

1-Year (Renewable Every Year)

(The above table doesn’t represent any chronological order)

How Does Group Term Life Insurance Work?

The group life insurance is offered through a master policy, which is issued to the group administrator. Here are the steps to buy a group term insurance policy-

Step 1: Decide the group life insurance Coverage Amount

Choose the amount of group term life insurance coverage you want for each member of the group

Step 2: Choose the group life insurance benefit option

The master policyholder can choose the sum assured for the group from any of the following-

  • Flat Coverage- It includes outstanding loan, bank deposit size, etc.
  • Graded Coverage- It is based on the grades of employees in a company.
  • Salary Multiple- It is computed on the basis of multiple of the annual salary. For instance, if the employee’s annual salary is Rs. 7 lakh and the multiple considered is 2 then his group life insurance coverage amount will be Rs. 14 lakh.

Step 3: Get a premium quote on Policy Bazaar

Fill in your basic details and we will come up with different group term insurance plan options.

Step 4: Pay the group term life insurance policy premium

Pay the group term insurance policy premium to start the coverage. The policy offers coverage for a period of one year from the date of commencement, subject to receipt of premium.

In case of the sudden demise of the member, the nominee is entitled to get the death benefit. Thus, it offers financial security to the member’s nominee.

Why Is a Group Term Life Insurance Plan Required?

In the present times, organizations are becoming more and more customer-centric and doing all that which is making their most valuable assets- employees- the happiest. One way to do so is to provide financial security to their families in unfortunate events like their demise. This is the reason companies are opting for group life insurance policies in India. The common benefits that most of the insurance providers cover under group term plans are:

  • Most of the group term life insurance providers offer benefits to the employees of the insured and their families at a very nominal cost
  • Avail tax deduction benefits under section 37(1) of the Income Tax Act, 1961on the policy premium paid
  • One of the most affordable ways to get life insurance cover
  • Gives financial security to the insured  employee’s family against any unfortunate event like critical illness or death
  • For employers’ perspective - they can get gratuity benefits along with life insurance cover
  • Members can be added or removed at any time during the policy tenure
  • It makes great employee retention and loyalty building tool

What Does a Group Term Life Insurance Policy Cover?

The common inclusions of various group life insurance plans are:

  • It provides life cover to all the members of a group
  • The choice to select the premium payment mode
  • Annual renewable term insurance plans
  • Most of these group term plans provide worldwide coverage
  • Generally, all the group term insurance plans have a quick claim settlement process
  • Group life insurance policies are not dependent on individual risks or age; therefore, they turn out to be the most affordable option for older employees
  • One does not have to undergo any medical tests before taking this policy
  • There is no waiting period in a group life policy as one gets covered in such plans immediately after joining the organization
  • In the event of the death, a pre-decided sum assured is paid to the beneficiary of the insured
  • Group life insurance plans are affordable than individual plans

Add-on Covers Under Group Term Life Insurance Plans

The additional benefits that an insured can ask for by paying an extra premium in a group life insurance policy are:

  • An individual can opt to continue the group term insurance policy even after leaving the company.
  • One can also get rider against permanent total disability
  • Cover against permanent partial disability can also be taken as a rider
  • Accidental death benefits are not added in a group life insurance plan; however, one can opt for the same by paying extra premiums
  • Riders for critical illness cover can also be taken

Tax Benefits of Group Term Life Insurance Plans

The Group term insurance policy premium paid by the company qualifies for tax deduction u/s 37 (1) of the I-T Act, 1961.

The Group term insurance policy premium that is paid by a company is not taxable as a bonus in the hands of the employees. However, the group life insurance policy premium that the employee pays for Critical Illness Benefit payments by Cheque qualify for tax benefits u/s 80C and Section 80D.

Any proceeds from a claim on this plan, which accrue to the employee or his beneficiaries, are exempt from tax under Section 10 (10D).

What is Not Covered by a Group Term Life Insurance Policy?

The common exclusions that most of the Group life insurance providers cover in their group term life insurance plan are:

  • A group term insurance policy does not cover death or disability that has occurred due to man-made disasters like a war or riots
  • A group term plan does not offer compensation for death resulting due to involvement in any unlawful activities Any self-inflicted injury and suicide are also not covered under a group term insurance plan
  • Disability or death incurred due to involvement in any kind of adventure sports is also not covered under a group term plan
  • None of the group term insurance plans cover death claims due to drug overdose or alcohol abuse

Compare and Find the Best Group Term Life Insurance Online

There are several life insurance companies that offer group life insurance policies and each group term insurance plan has its own advantages and this makes it difficult to choose the best group term plan. However, there are insurance web aggregators available online that provide a simple comparison of different group life insurance plans and help to pick up the most suitable group term insurance plan. These websites assist one by comparing different policies and hence find the best group term plan according to one's preferences.

How to File Claim for a Group Term Life Insurance Plan?

Follow the below-mentioned steps in order to file a claim in case of death of an employee:

  • Intimate the insurance provider immediately over a call.
  • Ask for the group term life insurance claim form or download it from the website of the insurance provider.
  • Duly filled this claim form and attach the following documents:
    • Insurance certificate
    • An original death certificate is given by the Local Authority or attested copy of the death certificate
    • The current address proof of the person who is filing the claim
    • Claimant’s photo id proof
    • Cancelled cheque/ Passbook issued by the bank/ bank statement of the claimant
  • Submit the group term life insurance claim form with all the required documents to the insurance provider
  • The insurance provider reviews these documents and passes or rejects the claim
  • The beneficiary of the insured is informed by the insurance provider regarding the approval or rejection of the claim
  • Most of the group life insurers provide a due date of the claim settlement in case of claim approval

Note: The beneficiary can check the status of the claim online on the website of the insurance provider or can use the insurer’s helpline number for the same. 

Written By: PolicyBazaar - Updated: 27 February 2020
Q:

What is a Group Life Insurance Policy?

Ans:

Group life insurance policies offer collective coverage instead of an individual cover to a group of individuals. Usually, employers provide this coverage to their employees under the EPF and Miscellaneous Provision Act 1952. The group can consist of any number of individuals who share a commonality, like employees of organizations, members of a society, club members, shareholders or a group of bank account holders

Q:

Will, it Cost Less Than an Individual Life Insurance Plan?

Ans:

Normally, the cost of a group life insurance is lesser than an individual life insurance plan.

Q:

What is a Contributory and Non-Contributory Plan in Group Life Insurance?

Ans:

In a contributory group life insurance plan, the beneficiaries make a partial or full payment for premium amount. For instance, the employer may deduct a specific percentage of the employees’ salaries, to provide them cover in a group life insurance plan.

In a non-contributory group life insurance plan, the insured members are not required to pay any amount in order to get coverage under the plan. For instance, if a company is paying the total policy premium amount for every one of its employees, then it will be a non-contributory group life insurance plan.

Q:

What are the Key Features of a Group Life Insurance Policy?

Ans:

The salient features of Group Life Insurance are:

1. All the group members get life coverage

2. This is an all-inclusive plan

3. The plan can be renewed annually

4. The plan offers global coverage

5. Members can be added or removed at any point in time

6. Quick and easy claim settlement procedure

Q:

What are the Various Kinds of Group Life insurance Plans?

Ans:

Usually, these are the variants of a group life insurance plan -

1. Group Term Life Insurance

2. Group Gratuity Plan

3. Group Mortgage Redemption Assurance Scheme

4. Group Critical Illness Rider

5. Group Investment Linked Insurance Plan

6. Group Leave Encashment Scheme

Q:

Can Group Life Insurance be converted after Completion of Employment Term?

Ans:

Usually, the coverage ends as soon as one’s employment is terminated.  In order to get it changed to an individual life insurance plan, you might need to pay an extra premium. This is subject to the insurer’s terms and conditions, and the plan you have subscribed to. However, there will be a hike in prices after the switch.

Q:

Mention Some of the Popular Group Life Insurance Providers in India

Ans:

Some of the Insurance providers that offer group life insurance in India are - Bajaj Allianz, SBI Life, and LIC & ICICI Prudential Life Insurance.

What our clients say