Why is group term life insurance necessary?
94% of the organizations in India, experienced a significant increase in their retention rate by just purchasing the best group term life insurance policy for their employees.
Top CHOROs believe that only when employees feel secure in an organization, they will go above & beyond to deliver the best in their roles.
What is group term life insurance?
A group term life insurance (GTL) is a policy issued to a group of people or employees of an organization that secures employees and their family members by receiving a death benefit in case of the sudden demise of the insured.
Under group term life insurance policy, employees could add beneficiaries to pass down the benefits of the policy in case the insured passes away.
While purchasing a group term life insurance plan, your organization makes all the critical decisions of the policy like the sum assured, add-ons, and more.
Organizations spend tons of money trying to ensure the protection of their employees but mostly fail. Sometimes the right investment could be as little as buying comprehensive group term life insurance that protects your employees at all times.
How does group term life insurance work in India?
Here is how group term life insurance work in India.
A group term life insurance cover is a blanket cover purchased by the employer for the employees. In case of the employee’s death, the sum assured amount/death benefit is paid to the dependent family of the employee.
To purchase the group term insurance policy, you have to
Choose your policy coverage
By taking the type of job and the occupation of the employee you can choose your policy. By policy, it means the coverage you wish to offer your employees. One important aspect of coverage is the sum assured amount.
The sum assured amount can be a flat sum assured, whereby you fix the sum assured amount for all your employees uniformly. The other is graded sum assured, here the sum assured amount depends on the CTC of the employee. So higher the CTC, the higher the sum assured.
The next step is to choose your group term insurance riders like terminal illness riders, critical illness riders. This makes the coverage more comprehensive.
Get a quote
Communicate your requirements to your insurance company. The insurer will take your coverage requirements into account and then provide you with a quote.
Your group term life insurance quote is highly dependent on factors like the employee’s age, grade of the employee, nature of the job, Covid vaccination status, and Covid history.
Implementing the policy
After paying the premium (most cases have annual premiums) the employees are covered under the group term life insurance policy. The employees can list the nominee to the policy, to whom the sum assured amount will be paid in case of the death of the employee.
The sum assured amount will be settled to the employee’s nominee according to the terms and conditions of the policy.
Benefits of group term life insurance policy
Avail tax benefits
Group Term Life Insurance plans provide tax benefits to employers. According to Income Tax Act 1961, employers can claim the premium paid for group term insurance under section (37)1 to avail of tax benefits.
Increase employee retention
When companies opt for a group term life insurance, it helps in the attraction & retention of top talents.
No medical check-ups
Employees need not undergo any medical check-ups for their group term insurance policy. Depending on the terms and conditions of the group term plan, employers can purchase the policy from Pazcare completely hassle-free.
Customizable riders
Group term insurance plans come with multiple add-ons/riders. You can choose to include the add-ons at affordable prices and make your policy as comprehensive as possible under your budget.
Key features of group term life insurance plan
Comprehensive coverage
Under a single group term life insurance policy, all your employees are covered. The complete cover gives a sense of security to your employees and their family members.
Bereavement benefit
In case of death, the nominee gets payment equivalent to the sum insured.
No medical reports
The previous medical reports of employees aren’t required to get insured which makes the process faster and easier.
No waiting period
As soon as you join any organization, you by default become a part of a group term life insurance policy. Employees can avail benefits of the policy from day 1.
Add-ons/ riders
You can opt for extensive riders to your existing group term life insurance policy. Some of the add-ons are critical illness coverage, permanent or temporary disability, accidental death, and more.
Why do you need a group term life insurance policy?
Secured workforce
By just buying group term life insurance, you as an organization are giving a sense of security to your employees as well as their family members. Your employees do not have to take up the hassle of buying personal life insurance. After all, secured employees can only give 100% at their work.
To increase the retention rate
When you care for your employees and their families' well-being as your own, they will stick to an organization no matter what. Employees want to be in a supportive environment. Organizations experienced increased retention rates by just providing comprehensive group term life insurance to their employees.
Show employees that you care
By genuinely caring for your employees, you will experience a motivated workforce in your organization. Tell them you’re there for them beyond just work.
How to get the best group term life insurance policy?
Do your policy research well
Always consider the sum assured amount while purchasing group term life insurance. The sum assured amount is the total amount an employee’s dependent receives if they pass away during the term.
Opt for add-ons/ riders
Adding riders to your existing group term plan will make your policy more comprehensive. Knowing the right requirement from your employees and opting for add-ons is the right way to go about adding riders to your policy.
Get a competitive quote
Make sure you get the right premium estimate for your policy. Your policy for group term life insurance depends on several factors like the number of employees, average age, industry, and so on.
Rolling out to your employees
Once you purchase the policy, let your employees add their beneficiaries. If the employee passes away during the term, the sum assured will be paid to the employee’s beneficiaries.
What should your group term life insurance policy cover?
Accidental death benefit rider
An accidental death benefit rider is an add-on feature that can be added to the group term plan. This rider gives the nominee of the employee the sum insured in case of an accident.
Critical illness rider
Critical illness rider is additional coverage. It can be added to the group term life insurance policy in exchange for an additional premium. A lump sum amount is provided to the family of the deceased employee who was demised from a listed critical illness during the policy tenure.
Permanent and partial disability rider
This rider becomes very crucial if your employees go through a partial or permanent disability following an accident that leads them to travel to the office. In cases like this, the insurance company provides them with a certain percentage (eg: 10%) of the sum assured for the next 5-10 years depending on the group term insurance scheme.
Who is eligible for group term life insurance in India?
In India, all banking and non-banking companies, employer-employee groups, non-employer-employee groups like social organizations, financial institutions, and other groups are eligible for buying a group term life insurance plan.
A formal employer-employee group should have a minimum of 10 employees to apply for a group term insurance plan. On the other hand, a non-employer-employee group should have a minimum of 50 employees.
All employees aged between 18 to 65 years are eligible for the group term insurance plan. However, the upper age limit can be decided by the insurer.
Why should you buy a group term life insurance policy from Pazcare?
Purchasing the best group personal accident insurance could be a daunting task. At Pazcare, our insurance experts help clients at every step and ensure the best quote at suitable premiums.
Here are some more reasons why you should buy group personal accident insurance from Pazcare.
One point of contact
No waiting on customer support calls. From the day you purchase the GTL policy, you will have a dedicated SPOC to handle your employees and help you out at all times.
Easy claim process
Even though the claim process differs from case to case. Pazcare ensures to help you out at every level of the claim reimbursement journey.
Go beyond insurance!
Now go a level further by adding health and wellness plans like therapy, wellness sessions, unlimited doctor consultations, and many more to your group personal accident policy.
Admin dashboard
Employers can use the Pazcare admin dashboard to make endorsements and manage and track their policies.
Mobile app for employees
Your employees can easily access their life insurance claims through the app or the dashboard.
Hassle-free claim process
Instead of you nudging the insurer and TPA, Pazcare stands in the queue for you so that you can sit back and relax.
HRMS integration
Pazcare dashboard can be easily integrated with your HRMS to automate endorsements.
Competitive costs
Instead of burning your pockets, get the best quotes for group term life insurance from Pazcare.
They love their employee benefits!
You can easily choose and build your benefits package. We have it all.
Prakash
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The Pazcare team was very helpful in helping us with the details and the documents needed for the claim process. Everything about the company is impressive.
Shreya Roy
The Dashboard is very easy to use and additions and deletion have become extremely easy and seamless. Employees have easy access to insurance details on the app
Hemanth Kumar Addada
The dashboard is also very user-friendly with a very good UI/UX.
Vishwanath HY
Dashboard really helps in getting quick response for any queries and reimbursement
Final thoughts
60% households in India have only one earning member in the family. Imagine the financial turmoil it will create after the demise of the breadwinner in the family. This is exactly why you need a group term life insurance policy that secures your employees’ dependents if they pass away.
As an employer, it is important that you foster a culture of care. Organizations can only retain top talents if employees feel they’re cared for and nurtured.
With Pazcare, our insurance experts will help you create the best group term life insurance policy that protects your employees at all times. Schedule a call today!
Frequently asked questions about group term life insurance policy
What is the age requirement to enter a group term insurance plan?
Although the term insurance for employees can vary when it comes to age, generally it ranges from 18 to 65 years of age. However, the maximum age of group term life insurance policy enrolment depends upon the insurer.
What is the tenure of a group life insurance plan?
The group term life insurance plan is valid as long as the employee works with the current employer. The general tenure of a group term insurance plan is 1 year.
What is the minimum sum assured under the group term life insurance scheme?
The group life insurance scheme assures a minimum of Rs 1000 - Rs 5000 depending on the plan.
Can I continue with my group term life insurance coverage if I leave my current employer?
No, the policy ends with the termination of your service with your employee. However, the employer can port your policy into individual term insurance in certain cases.
What is a death benefit?
In case of premature death of the insured, the insurance provider pays the assured amount as a death benefit to the designated nominee.
Are riders available with the group term insurance plans?
By paying some extra amount to your group term insurance policy, riders can be added. Some riders include critical illness cover, total permanent disability rider etc.
Do I get a maturity benefit under the group term life insurance plan?
No, there is no maturity benefit included in your group term life insurance cover.
What does my group term insurance policy cover?
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.
What are the documents required for a group term life insurance death claim?
The following documents are required for a group term insurance death claim
1. Original death certificate (attested)
2. Policy documents
3. Identity proof
4. Bank details
5. FIR copy
6. Letter from the employer
How is the group term life insurance premium calculated?
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.
How to buy a group term life insurance policy online?
To buy a group term insurance policy online, get in touch with Pazcare. Our insurance experts will connect with you to understand your requirements. For example, the type of sum insured - flat/graded, the addition of riders, etc. After this, our team of experts will get back to you with 10+ quotes from insurers. You can choose the best offering and proceed with the payment. Once done, the onboarding process starts within 24 hours of group term insurance policy purchase.
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