A group term life insurance refers to a term plan that includes a group of people for a given period. It provides full coverage to all family members and properly compensates the dependent family members if the policy bearer does so.
This amount can be paid in total or as a monthly payout. Companies usually purchase these policies as an additional perk for their employees as an added perk of the employment. This is because group-term life insurance is comparatively cheaper when compared to individual policies.
Features of a group term life insurance
This consideration of group term life insurance can be the best term plan for 1 crore and such big amounts as it is comparatively cheaper. Here are a few of its benefits:
Payouts on the demise of policy bearers
In case of the sudden demise of any group plan member, the total guaranteed amounts will be provided to the nominee of the policy bearer, an existing employee. The individual will do this nomination before the demise of issuing the policy.
Employee cover
This term insurance plan usually comes with all other perks that come along with having a benefit package for an employee. Some businesses allow employees to add other benefits that will be continued even if they can’t continue working for any given reason.
Portability
Since this policy is connected to the employment of a person in the company, it is intended that the coverage might end when the employment period ends. However, many companies give an option of converting group policies to individual policies, which will lead to higher premiums.
Benefits of Group Term Life Insurance
For larger amounts, the best term plan for 1 crore will be a designated group term life insurance. Some companies also include unpaid debts, critical illness, and other injuries. Here are a few benefits of the same.
Insurance cover at default stage
The group term policy includes all members that are immediately joined to the list of employment. It provides basic coverage to all members irrespective of having any other policy.
Gratuity Funding policy
The gratuity liability of the workers allows the workers to have a structured approach. This helps the employer and the company manage a group of employees.
Tax Benefits
The employers and contractors both profit in high amounts due to the presence of group term life insurance. Death benefits given are tax-free according to section 10 D, which is a part of the Income Tax Act (1961)
Customizable for Employees
Each employee can also opt for additions like tuition fees, accidents, and more, depending upon their requirements. Thus, they have a higher benefit value in addition to a base cover.
No medical checkups
The only prerequisite to being a part of a group term life insurance is a person’s employment status. The employee does not need to go through the hassle of any medical checkups.
Easy on the pocket
This is the most important benefit for the company in terms of finances as the company has to pay less in a batch than to pay for each employee’s allowances. Funds that perform well lead to higher returns and, hence, per-employee costs are reduced.
The Bottom Line
The presence of a group plan ensures all company employees work well in many situations. This also acts as an additional perk for interviewers and employees to join a company. One getting employed must always ask about such extra benefits and be clear on its terms. This allows them even to plan any additional perks that they might need. Doing so will be cost-effective for the employee as well along with the company itself.
Contact PNB MetLife for more information on group term life insurance.