A Few Things About Group Life Insurance That You Must Know

An effective way to keep yourself and your family safe from an unprecedented situation is by getting life insurance. When you buy life insurance plans, you are safeguarding your family’s financial future for a time when you’re not around. Through the best online life insurance, you can stop worrying about your family’s financial stability in your absence. Taking this into consideration, many employers provide their employees with group life insurance plans to help their employees feel safer.

What are Group Life Insurance Policies?

Group life insurance policies are insurance plans that cover a large group of people. These plans are generally offered by a company or employers to their employees, with the employer being the policyholder. Since the plans in a group insurance policy are quite inexpensive as compared to other life insurance plans, they also provide limited coverage.

Benefits of Group Life Insurance:

  1. The premiums on these plans are minimal compared to individually bought plans.
  2. You have the option of adding riders like accident benefit, disability, critical illness, etc., to the plan.
  3. The premium payment mode can be selected by the insured, depending on their preference.
  4. The premium amount paid is subject to tax benefits under Section 37(1) of the Income Tax Act.

The group life insurance policies provided to employees are divided into two types:

  1. Fund management:
  • Group Gratuity:

Through this scheme, employees are offered gratuity as risk cover when they retire, resign or separate. This scheme, however, comes with a clause. The employee must have completed a specific number of years with the company.

  • Group leave encashment:

This scheme is to fund an employee’s leave. The encashment of the leave should be paid to the employer.

  • Group investment plan:

This scheme provides the employees with insurance coverage along with investment options in India.

  • Critical Illness rider:

The rider is an add-on chosen with the insurance plan for the group. Such riders provide financial support if an employee suffers from a critical illness.

  1. Term Insurance:

Employees can enjoy the risk coverage from the group term life insurance for a specific time. If a group member meets their ultimate demise within the period, their beneficiaries will get the benefit. The policy’s term is for one year and the premium paid will depend on the company’s (employer’s) experience, age and number of deaths in the company.

What Does Group Life Insurance Cover?

The plan provides extensive and defined coverage to the members representing a specific profession like NGOs, trade and organization. This plan covers:

  • Terminal illness.

How Does Group Life Insurance Work?

The following steps will demonstrate how these policies work:

  • First, the members of the group will choose the cover and the amount.
  • Employers get the option of selecting the coverage amount from different benefit plans.
  • To initiate the policy, the premium would have to be paid before. The risk coverage is for a year from when the policy starts.
  • When the member of the group dies, the beneficiary from their plan will get the benefit.

What are the eligibility criteria for a group life insurance plan?

The group life insurance policy is provided to the listed below institutions:

  • Banks
  • Non-banking financial institutions
  • Employer-employee groups
  • Microfinance

While getting group life insurance can be quite helpful, you must understand the claim process. Learning about the process can be quite beneficial, as it will be helpful during a stressful time.

Group Life Insurance Claim Process

The first step to filing a group insurance claim is to inform the insurance company about the same as early as possible. Once you have notified the company, you must submit all of the necessary documents to the insurer. After the submission of these documents, the insurance company will assess the details and settle the claim accordingly.

The documents you will require at the time of filing the claim are:

  1. Filled claim form
  2. Certificate insurance
  3. Hospital certificate
  4. FIR
  5. Death certificate
  6. Address, identity proof of nominee

Group life insurance policies come in different types and provide coverage for the policyholder’s terminal illness or death. Through these plans, employees would have the choice of selecting the coverage amount from other plans.

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