How helpful is a company that provides insurance to their employees?
Many companies provide their employees with group life insurance, a financial safety net. It allows for financial security in different steps in life. However, apart from being a beneficial tool for the employee, it also acts as a positive perk for the organization/employer too if in case you might be asking yourself what is whole life insurance Canada.
For any organization, an employee’s productivity is critical, leading to the team and organization’s success. Having insurance dedicated to your employees can act as a valuable tool to endorse the element of empathy, productivity, and credibility amongst the employees in the organization.
Secondly, as part of an employee compensation package, a group life insurance plan safeguards both employees’ and company’s cash at the most affordable rates.
This blog will help you in understanding,
- What is group life insurance?
- What are their benefits and features?
- How is it beneficial for the employee and employer?
- Which is the best group life insurance?
What is Group Life Insurance?
A group insurance policy is one of the clusters of life insurance policies, and as the name suggests, it is built to cover many people under one policy. Here, the employer/organization offers group life insurance to the employee. Such insurance policy provides coverage to the members of that organization.
However, a group life insurance is not limited to the employer-employee groupings but also includes groups encouraged by – bank customers, non-government organizations, non-banking financial firms, microfinance institutions, and many more.
A group life insurance helps you in multiple ways, such as – if the policyholder meets with an untimely death, the plan provides financial help and independence to the employee’s beneficiaries. Apart from the death benefit, it also offers a variety of uses like – universal coverage for all to tiered coverage for different levels of members, cover existing loans for a group of lenders, critical illness, and disability coverage.
Types of Group Insurance
Group Life insurance is a vast umbrella, and every insurance has its own sub sections that are carefully curated to solve the dilemmas of people from different walks of life. There are two types of group insurance policies that are widely used in India, and they are as follows:
- Permanent Life Coverage
- Term Life Coverage
The permanent life coverage provides an elongated insurance coverage that runs through the duration of the policyholder’s life. And, just because they serve for a longer phase doesn’t mean they come with a full fledged set of liberties, instead they too have certain checks and balances. Under such insurance policy, the payout will not be available to the employee if they opt for a general group insurance plan, however, it will be available once they resign from the organization.
A group life insurance can be renewed on a yearly basis based on the needs of the policyholder. When your present company provides the employee with group term insurance, usually the employer pays the majority (and in some circumstances all) of the premiums.
And, the term group coverage stays in effect until you leave your job or the term coverage expires. Moreover, if you quit your job, you may get the option to transfer your group coverage to an individual insurance.
Note: The policyholder has the chance to reap the benefits of both term and whole life insurance plans if they choose a paid-up policy. Here, the organization will cover the costs of the term policy and the employee will be responsible for the entire insurance component.
What are the Advantages of Group Life Insurance Policies?
- Gratuity: Under this feature, once the employee completes a specific set of years in an organization, they are eligible to avail gratuity benefits from their employers. And, by acquiring a group life insurance plan, the organization can accumulate funds to provide a gratuity benefit to employees.
- Protection for credit: Usually, banks and loan-providing firms use group credit protection plans to defend their interests. But, this insurance plan helps bust their tactic, as group term life prevent banks from facing any losses if the borrower dies or becomes disabled and cannot repay the loan.
- Pocket-friendly premiums: As it is a group life insurance, the percentage risk is evenly dispersed, so the insurance premiums are less expensive than other forms of life insurance premiums (30% – 35% cheaper than buying individual life insurance). Here, the premium cost is divided between the employees and the employers.
- Who doesn’t want riders? Yes, with the group term life insurance plan, the policyholder has the freedom to increase their respective coverage by adding a rider benefit at an affordable fee. Depending on their needs and requirements, the policyholder can acquire rider advantages such as personal accidental benefit, critical illness benefit, and many more.
- Coverage for the family: How fruitful will it be when your company can also afford to safeguard your family? Well, the group insurance plan covers the policyholder’s family members. If the insured has a group insurance plan, they don’t need to purchase separate life insurance for their family.
Whereas a term life insurance coverage gives the policyholder to renew the policy every year, if one wishes to enroll for this insurance, they can avail it without providing any proof. Also, you may have this plan without having to take any medical checks.
Under this type of insurance plan, employers and employees can benefit from a quick and transparent method. If the employee contributes to the insurance plan, the amount paid is tax-deductible under section 80C.
Best Group Term Life Insurance in India
After learning about the group insurance, let us bring you some of the best group term insurances available in India, and they are as follows:
Aditya Birla Sun Life Insurance Protection Solutions
To begin with, this particular group insurance by the ABSLI is an ideal approach for businesses to strengthen their relationships with their employees, as it offers life insurance to members by paying a lump sum payment to their employees if they meet with death. Under this group term insurance plan, the beneficiary will be covered for – accidental death, disability, critical and terminal, and many more.
Features and benefits of the ABSLI Protection Solutions are as follows:
- Under the death benefit feature, the sum assured is paid to the beneficiary if the policy term is still active.
- The policyholder has the freedom to select from a range of cover alternatives.
- If the policyholder surrenders the policy, the member can continue their coverage as individual insurance.
- As it is an extensive plan, the policyholder can choose from 5 optional benefits and 8 riders.
And, the riders are as follows –
- Accidental Death Rider
- Critical Illness Rider Benefit
- Accidental Death and Dismemberment Rider
- Term Rider
- Critical Illness Premier Rider
- Critical Illness Plus Rider Benefit
- Total & Permanent Disability Rider
- Accelerated Critical Illness Premier Rider
Note: This group insurance plan comes with complete flexibility, with the sum assured being the same for all qualified employees or varies depending on each grade or payscale.
Aditya Birla Sun Life Insurance Group Income Replacement Plan
Our following best in line is the group insurance offered by the ABSLI, where this plan replaces your member’s monthly income to guarantee that your necessities are satisfied. It also provides a steady income if the policyholder is diagnosed with any deadly disease or disability.
The features and benefits of the ABSLI Group Income Replacement Plan are as follows:
- Under the income benefit feature, if the policyholder is diagnosed with any of the mentioned critical illnesses or disabilities for the first time, they are eligible to avail of the income benefit.
- As per the insurance plan, the master policyholder will increase or decrease the members’ coverage amount over the year.
- Under this plan, the premiums will be paid annually, semi-annually, quarterly, or monthly.
- You can include a new member in the plan by paying a pro-rate premium for the future policy year’s coverage, or you can pay the entire premium for one year of coverage from the member’s risk start date (read through the scheme).
Group life insurance policies are comprehensive insurance plans that provide many benefits such as gratuity, income benefits, riders, death benefit, and many more.
Therefore, one should first understand the plan’s dynamics and then assess it as per your needs. Therefore, always choose the right plan from the apt insurance providers because the better you serve your employees, the better will be productivity and loyalty towards the organization.