A group term life insurance plan is a pure life insurance cover provided by an employer to a group of employees under a single master policy. In simple terms, group term life insurance means financial protection offered to employees’ families in case of the employee’s untimely death during employment.
Under this policy:
Because it is employer-sponsored, group term life insurance benefits are often available at lower premiums compared to individual policies
Riders are additional provisions that can be added to your group term insurance policy, usually at an additional cost. These are however not mandatory. They offer supplementary coverage and increased security against potential risks. They provide additional coverage against specific risks beyond natural death. While not mandatory, riders can significantly increase the overall protection offered under a group term life cover.
These riders are advantageous add-ons that can be selected alongside your group term insurance policy at affordable rates. They enhance the scope of your policies and provide extensive coverage, encompassing more than just the expenses related to your death.
A group term insurance policy usually comes with 2 rider options, in most cases this can go up to 4 rider options. The employers can pay an additional premium from the base policy to add the optional riders to the base policy.
Unlike a life insurance policy, the GTLI does not have the option of an income benefit rider or waiver of premium rider, as the premium towards the policy is mostly paid by the employers and all the employers are covered under one master policy.
The accidental death benefit rider to a group term life insurance policy provides an additional benefit to the policyholder's nominee in the event of the policyholder's death resulting from an accident or mishap. This rider enhances group term life insurance benefits by providing double financial protection in high-risk situations.
The total permanent disability (TPD) rider provides financial protection to the policyholder in the event of total and permanent disability.
This rider pays out a lump-sum amount to the policyholder if they become totally and permanently disabled due to an accident or illness, and are unable to work and earn an income for the rest of their life. In a comprehensive group term life insurance plan, this rider adds significant value by protecting not just life, but livelihood.
The critical illness rider pays out a lump-sum amount to the policyholder if they are diagnosed with a critical illness that is specified in the policy document, and the policy terms and conditions are met.
Usually, a list of 19 illnesses is listed as critical illnesses. Some of them are -
Cancer of specified severity, Open Chest CABG, Myocardial Infarction, Kidney Failure requiring regular dialysis, Major Organ Transplant (as the recipient), Stroke resulting in Permanent symptoms, Apallic Syndrome, etc.
Here are the benefits of adding a rider to your group term life insurance policy.
Always keep in mind that the addition of riders to the group term insurance policy comes with an additional premium from the base policy.
Also read: Group term life insurance benefits
A standard group term life insurance plan primarily covers death due to natural causes. However, real-world risks extend beyond that.
Adding riders allows employers to:
A well-structured group term life cover should balance cost with comprehensive protection.
Adding riders is especially beneficial for:
Riders make your group term life insurance benefits more meaningful and employee-centric.
Offering a group term insurance policy for employees can be a very beneficial employee benefit. Not only it can boost your employer branding but can also offer you tax benefits. Typically, a group term insurance policy from Pazcare can be a 2 in 1 benefit for your organization. It also comes with additional benefits like
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No hiccups in buying, issuing and making endorsements. Pazcare makes employee insurance effortless for you.
The group term life insurance premium depends on various factors like the age of the employee, grade of the employee, nature of work, and covid vaccination status.
It’s a master policy that provides life insurance coverage to all employees in an organization under a single contract, ensuring financial protection for their families.
A group term insurance policy covers both the employee and their family in the case of an unfortunate event like death. The policy term is usually one year, so during this period, the benefit (the sum assured) will be paid to the nominee in case of the employee’s death. If riders are added to your policy, then even partial or total disability can be covered.
Nomination is not legally mandatory, but it is strongly recommended to ensure faster claim settlement and avoid legal complications.
Group term life insurance is for one year. It is renewed by the employer every year.
It’s the guaranteed amount the insurer pays to an employee’s nominee if the employee passes away during the policy term.
There is no fixed maximum, but most companies offer coverage between 2x to 5x annual CTC. Larger organizations or leadership roles may receive higher multiples based on risk appetite and benefit strategy.
Best pricing for you.
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