Group Term Insurance Plan

An insurance coverage that is offered by the employer to the employee for the period he is associated with the organization. Such schemes have become the most important component offered along with benefit packages. It is vital to buy a life insurance cover for those who have financial responsibilities.

Eligibility for group term insurance plans:

  • Employer - employee groups
  • Banks
  • Non employer - employee group
  • Professional groups
  • Non - banking financial institutions
  • Microfinance institution

Benefits offered by group term insurance plans for employers:

  • Employers are aided In funding their gratuity liability with ease under the group term life insurance policies. Gratuity funds are built strategically to fulfil subsequent gratuity payments, thus, reducing the burden on the employer.
  • Returns on the funds will be earned according to the performance of the funds chosen by the client.
  • Group term life insurance policies in india are more economical because administering schemes on group basis has a lower cost.
  • Funds that perform better will earn increased returns consequently decreasing the expense to the employer.
  • Some plans offer employers with both life insurance covers along with gratuity benefits.

Benefits offered by group term insurance plans for employers:

  • Employees are assured of financial assistance being extended to their families in the unfortunate event of their demise, critical illness, etc.
  • Employees can enjoy death benefits that are exempt from tax under section 10(10d)
  • Easy administration by way of simple documentation
  • Can be customized to meet niche needs of the employees enrolled

Nature of a group term insurance policies:

  • A certain group contingent and conditions are checked before providing insurance
  • Medical report Are not required to take the policy
  • Maturity value is not provided
  • Scheme covers death
  • Additional benefits Depends on the decision taken by the insurance company and the group company.

General factors as defined by various group term schemes:

Premium: mostly, the premium is paid by the employer to the insurance company. It depends on the number of lives insured as per their age and nature of work. There are certain policies that allow the members to make Contribution towards the premium of the scheme.

Double accident benefits: in case the insured/ employer is paying an additional premium to the insurance company then a double accident benefit can be offered to the employee. This benefit does not include the permanent disability benefit.

Save Tax
up to
Rs. 46,800
Section 80 (C)

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