Group Life Insurance

A Group Life Insurance policy covers an entire group in one contract. Generally, the policyholder of such policy is the employer and the policy provides coverage to its employees. In this way, group life insurance plans provide life insurance protection to a group of people. Since these policies are taken for a group of people, thus they are available at low cost.

Features of Group Life Insurance:

The policy comes loaded with such features as:

  • Provides life cover to all members of a group
  • One master plan to cover all members of the group
  • Annual renewable term plan
  • Worldwide coverage
  • Addition and deletion of members at any point of time
  • Quick claim settlement process

How Does Group 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 group life insurance-

Step 1: Decide the Cover Amount

Choose the amount of cover you want for each member of the group

Step 2: Choose the benefit option

The master policyholder can choose to 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 salary

Step 3: Get a premium quote on PolicyBazaar

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

Step 4: Pay the premium

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

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

Why Is It 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 such plans are:

  • Most of the insurance providers offer benefits to the employees of the insured and their families at a very nominal cost.
  • Tax benefits under section 37(1) of the Income Tax Act, 1961.
  • One of the most affordable ways to get life cover.
  • Gives financial security to an employee 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 of the tenure.

What Does a Group 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 plans provide worldwide coverage.
  • Generally, all 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 this type of policy as one gets covered in such plans immediately after joining the organization.
  • On the event of the death, a pre-decided sum assured is paid to the beneficiary of the insured.
  • Affordable than individual plans.

Add-on covers under Group Life Insurance

The additional benefits that an insured can ask for by paying an extra premium are:

  • An individual can opt to continue the policy even after leaving the company.
  • Since most group, life insurance policies are term life, but some insurance providers give an option to the insured to purchase it for whole life, which means he/she is covered until he/she dies.
  • 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.
  • Rider for critical illness cover can also be taken.

What is not covered in Group Life Insurance?

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

  • Death or disablement incurred due to man-made disasters like war or riot.
  • Death due to unlawful activities of the insured.
  • Any self-inflicted injury and suicide are not covered.
  • Disablement or death incurred due to involvement in any kind of adventure sports.
  • Death due to drug or alcohol abuse.

Compare and Find the Best Group Life Insurance India Online

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

How to Claim?

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

  • Intimate the insurance provider immediately by the call.
  • Ask for the 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 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 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 insurer’s helpline number for the same.

Need Help?

There are various companies offering group life insurance plans and each one of them has its own benefits, making it tough to choose. PolicyBazaar facilitates easy comparison of plans to help you pick the right plan. We assist you by sieving through different group insurance policies and help you find the plan in sync with your expectations.

Best Financial Calculators:

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

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.

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.

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

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

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.

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.

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