Who Can Take Group Term Policies?
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A group term life insurance is nothing, but an insurance coverage provided to a group of people or anyone who is a part of the community. It offers financial independence to the insured individual’s beneficiaries. A group term life insurance plan not only is inexpensive compared to individual term plans but also comes with a whole lot of other term insurance benefits, making the plan a perfect fit for your needs.
Apart from being available for a community, group term insurance is one of the employee benefits offered by companies to their employees. Under this group term insurance policy, a lump sum death benefit is paid to the family of the insured in the unfortunate event of his death.
How Does Group Term Life Insurance Work?
After understanding what is group term life insurance, here’s how the policy works:
- An eligible individual from the community or organisation (the employer) is issued a master policy.
- To initiate the group term plan, the primary policyholder has to pay the initial premium amount. This amount covers all the members in the group for one year.
- Then the eligible group members are given the option to choose the coverage. This amount can be a lump sum or linked to a salary account.
- In case any member wants to enhance the basic coverage of the group insurance policy, they will have to pay the additional premiums from their pocket.
- Group term life insurance plans are annually renewable. The master policyholder has to continue paying the premiums so that the members of the community/organisation can enjoy the benefits of the group insurance policy.
Who is Eligible for Group Life Insurance Policies?
Group term life insurance policies are offered to the following sections of people-
- Employer-employee groups
- Non employer- employee groups
- Banks
- Professional groups
- Non-banking financial institutions
- Microfinance institutions
There are many varieties of group life insurance policies.
Following are some examples-
- Some plans may offer uniform covers to all of its members
- Some plans offer ranked covers for various grades of members
- Some schemes provide cover for outstanding housing loans, car loans, etc.
- Some schemes have riders like critical illness benefits, accident benefits, disability benefits, etc.
Conclusion
Engaging in or taking part in hazardous activities, including but not limited to, diving or riding or any kind of race; martial arts; hunting; mountaineering; parachuting; bungee-jumping; underwater activities involving the use of breathing apparatus or not. Hazardous Activities mean any sport or pursuit or hobby, which is potentially dangerous to the Insured Member whether he is trained or not will not be entitled to the benefits term life insurance. f a group term life insurance.
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