Life insurance has always been vital to everyone. Life insurance is an invaluable financial assurance in case of sudden death or disability. At its simplest, life insurance functions as a lump sum pay-out to the beneficiary if the insured dies before retiring. For this reason, it plays a crucial role in providing long-term income security to our loved ones.
The transition from having employees have their life insurance policy to a group term life insurance policy is becoming more common, with many employers adding this option to their benefit programs. But, before you sign up for group insurance, here are specific facts you should be aware of.
What exactly is a Group Term Life Insurance Policy?
Employers give group term life insurance to their team members as a component of their employee benefits package. Many significant organisations offer complimentary group term coverage to all their workers and an option to modify and add add-ons to their policies for a low fee. Each company’s plan determines the sort of coverage provided. Typically, individuals between the ages of 18 and 60 are often eligible for group term life insurance coverage.
What are the Requirements of Group Term Life Insurance?
Typically, if an employee meets the eligibility conditions set by the company, they are immediately enrolled in a standard group life insurance policy coverage. Working a specific number of hours each week or a set number of months as an employee are examples of such eligibility requirements. It is important to notice that these criteria are set by the company, not the insurance provider.
On the other hand, supplemental coverage is not readily offered. Enrolment in these policy plans is only possible when an employee works on a higher level or goes through any qualifying life event, like pregnancy or childbirth. The company can also add supplemental group term insurance coverage during open enrollment.
Personal underwriting may be required for supplemental coverage. It is typically a streamlined underwriting procedure in which the employee seeking the coverage answers a few questions to assess eligibility instead of having to undergo a medical examination. The insurance company will determine whether or not to provide the additional coverage to the individual.
If someone has a history of diseases that would make them too risky to cover, the company can decline to offer additional coverage.
What are the benefits of Group Term Life Insurance?
Here is a list of the benefits that are offered by group term life insurance policies:
1. Affordable Premium
Group term insurance offers companies the benefit of providing employees with much lower premium costs than if they had to cover the same amount out of their own pockets. Aside from that, most insurance firms offer significant discounts on yearly premiums if the company meets a particular number of insured persons under a single group term policy. This can be a huge benefit for companies because it reduces expenses and allows the company to provide employees with what is often seen as essential protection.
2. Maximising Employee Benefit
When it comes to providing benefits, group term life insurance is among the most common things you will see offered by employers. These types of insurance coverage protect the employees from the financial risks of sickness, accidents and health. With these types of insurance available, there are many ways for the company to customise the base packages depending on its budget and the employees’ needs. Offering workers a group term life insurance guarantees they stay committed to their employment.
3. Performance Boost
If you are an employer and want your employees to focus on their work, there is no better way than providing them with group term life insurance. This is because employees are relieved from worrying about compensation in case of their death as they get covered by a life insurance plan that reduces the financial stress associated with their families’ health and finances.
4. Tax Advantages
Income Tax Act Section 37(1) allows the firm or employer to claim tax breaks on the paid group term life insurance premiums.
Why choose Group Term Life Insurance?
Group life insurance plans are an excellent method to safeguard your employee’s family and provide financial stability in the event of an unexpected death. Many firms across the globe have begun to provide group term life coverage to their workers as one of the perks of working for them. A group term life policy is an elective benefit offered to employees that covers their spouse or dependents if the insured individual dies before retiring.
Compared to group term life insurance coverage, group accident insurance plans and group medical insurance plans have certain limits. Group life insurance products pay out a death benefit to the beneficiaries and cover various essential and pre-existing illnesses specified in the contract.
Group term life insurance policy is nothing like its individual counterpart in terms of cost. Group life insurance plans are a great way to attain affordable life insurance coverage for all your employees. As you can see from the list of benefits, a good group life insurance plan can work wonders for its participants when used prudently. But, it is always better to clearly understand things before you try your hands at them. Like other products and services, only an informed purchaser enjoys the maximum benefit of the deal.