Group Term Life Insurance: Simplified

June 17, 2021

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what is group term life insurance

Companies across the world today are facing a common challenge-employee retention. Given the rapidly evolving job market, employees today have access to job opportunities offering good compensation and employee benefits. Thus, it becomes important for employers to take good care of their employees to ensure they stick around and stay happy. Group term life insurance is a popular tool to protect employees and their families. Providing group term life cover to employees helps increase employee satisfaction and build a safe financial future for them. Read on to know the benefits of group term life insurance. 

What is group term life insurance? 

Group term life insurance is a comprehensive term policy purchased by employers for the employees working in the company. A single policy is purchased for the entire group which means the employer is the policyholder. Under this type of insurance, in case of the unfortunate demise of the employee during the policy term, a lump sum amount is paid out to the nominee. This type of insurance is usually provided free of cost by the employer, or the employer may deduct a certain amount from the employee’s monthly salary. The sum assured is usually decided by the employer based on the age, grade, designation, experience, etc. of the employee. The minimum entry age for this type of insurance is 18-60 years. 

Group term life insurance benefits:

Group term life insurance For employees:

Financially secures employees’ families: In case of an employee’s death during the policy term, the nominee gets the death benefit. This, thus, ensures that the future of employees’ families is financially secured. It also gives employees peace of mind and a sense of relief knowing that their family will have access to funds, even after their demise. 

Affordable/zero premium 

Under group-term life insurance, the risk is shared between the group members. This thus reduces the premium. The premium is usually paid by the employer or is deducted from the employee’s salary. However, the premium is lower than that of an individual term insurance plan. 

Tax-free  

The death benefit given to the nominee on employee death is tax-free under section 10(10D) of the Income Tax Act, 1961. 

No pre-policy medical checkup 

Under group term life policy, employees do not need to undergo medical checkups unlike individual term plans which usually require the applicant to go through a series of tests 

Rider options 

By paying minimal premiums, employees can choose to enhance coverage of their term plan by adding various riders such as critical illness riders, accidental death benefits, permanent disability riders, etc. 

Group term life insurance for employers:

Tax benefits

Tax benefits on premiums paid for term life insurance are eligible for tax deduction under section 37(1) of the Income Tax Act, 1961. 

Boost employee productivity and performance

Group term insurance ensures a stress-free environment for the employees as they do not have to worry about their family’s future. This thus helps in boosting employee productivity and performance.  

Tackle employee attrition

Providing group term life coverage to employees makes them feel valued and cared for, in turn helping organisations retain and attract new talent. 

Providing group term life insurance coverage to employees is a cost-effective way to boost employee productivity and care. If you are an employee looking to provide group term life coverage to employees, then you can choose Onsurity for your employees’ life care needs. 

Added Advantages of Onsurity as Facilitators of Group Term Life Insurance   

Onsurity offers you to purchase group term life insurance for your employees at an affordable rate for which you can make payments on a monthly basis. Moreover, you also get support at the time of claim. LifeCare is just one of the many benefits of Onsurity’s wellness membership plans. If you are a small business employer, it is important you give your team access to the best possible employee wellness benefits. With Onsurity, you can do just that, while saving up to 50% on your healthcare costs. It is the best way to thank your employees for all their hard work. 

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