What Is Group Term Life Insurance
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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.
Reasons to Buy Group Term Life Insurance
The Group Term Life Insurance offers group life insurance coverage of up to Rs. 1 Crore, thereby offering a financial assurance to your family in your absence.
1. No Medical Underwriting
A unique Group Insurance plan that offers high life insurance coverage of up to Rs. 1 Crore without the need to undergo any medical examination.
2. Critical Illness Rider
You can enhance your protection and customize your Group Insurance plan with an add-on cover for Critical Illnesses like Cancer, Kidney failure, Heart Attack, etc. with coverage of up to Rs. 10 Lakh.
3. Cost Effective
A Group Term Insurance plan is an extremely cost-effective option for any individual as the premiums are significantly low in comparison to that of individual term insurance plans.
4. Tax Benefits
As per the prevailing Tax Laws, the premium paid towards a Group Term Life Insurance plan is exempt from any taxes, under Section 80C of Income Tax Act.
Requirements of Group Term Life Insurance
- To be eligible to reap the benefits of the group term life insurance plan, one has to be a member of the community or organisation.
- All the members of the community/organisation can avail the benefits of the policy.
- The master policyholder is the only one who can add members to the existing policy.
- The newly added members can begin to avail the benefits of the policy immediately after the addition to the group.
- This term insurance policy offers basic coverage to the members. However, the members will have to pay the extra premium if they opt for additional benefits.
- Claim Process for Group Term Life Insurance
- Filing a claim is quite straightforward. Just follow the steps below and you are done.
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.
Also read: What Is Term Insurance Plan
