Group term life insurance, also known as GTLI or group term insurance is a type of term insurance cover offered by employers to employees. This is often offered as a part of the organization’s employee benefits program.
In most cases, the employers pay the premium towards the group term insurance policy coverage. This policy cover ensures that one master cover provides term insurance coverage to a group of people, here the employees.
However, the scope of group term insurance coverage can be increased by the addition of certain riders to the existing policy. Let us deep dive into understanding riders, their types and benefits.
Riders in insurance - what are they?
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.
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.
Group term insurance riders - types of riders in insurance
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.
- Accidental death benefit rider
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.
- Total permanent disability rider
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.
- Critical illness rider
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.
Benefits of riders in group term life insurance
Here are the benefits of adding a rider to your group term life insurance policy.
- The addition of a rider to your group term life insurance policy increases the coverage of your policy. This means enhanced policy at cheaper premiums for your employees
- Tax benefits - as employers by paying the premium towards a group term insurance policy, you receive tax benefits according to section 80C of the Income tax act.
- Customization and flexibility - a group term insurance rider is not mandatory. But adding the riders can customize your policy according to the employee’s needs. And you can add any rider from the options available according to the terms of your 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
Group term insurance from Pazcare
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 organisation. It also comes with additional benefits like
- Free employee wellness sessions from Pazcare
- A tech-enabled easy-to-use dashboard to manage the policy
- A dedicated mobile app for employees to manage their policy
To know more, get in touch with us.