“The Group Term Life Insurance policy provides financial security to the insured’s immediate family in case of sudden death or critical illness” and to ensure a stress-free and harmonious life for the insured’s family members with no financial obligations. Health insurance is becoming popular within business organizations as it provides a sense of security among employees, thereby creating a dedicated workforce.
Different types of health insurance policies are available in the market from which individuals can select the most suitable option for themselves. Group term insurance is one of the popular and efficient policies of life insurance that provides immense benefits for employees as well as for employers.
Group Insurance
Group insurance can be defined as a type of life insurance policy that provides health coverage and other benefits for multiple individuals under one plan. Group insurance focuses on providing financial protection for the beneficiaries of insured members in case of sudden demise or critical illness.
Group Term-Life insurance
Group-term Life Insurance is a type of life insurance policy in which the financial coverage and benefits are provided for the beneficiaries of multiple insured members or groups under a single plan. Group term Life Insurance is different from regular group insurance because it provides financial coverage for a group of people for a specific period or term in exchange for a premium payment determined in the policy before commencement.
Group life insurance provides financial compensation for the family members of the policyholder who die within the policy duration or term. The duration or term of Group Term Life Insurance can be decided by the policyholder before buying the plan, ranging between 5 and 40 years according to their suitability.
Features of Group Term-Life Insurance
Default coverage
Group term Life Insurance is the simplest form of group insurance in which the members will get life coverage for a specific duration just by being the members, known as default coverage. The members of the group term Life Insurance do not need a pre-medical examination to claim the health and other benefits of the insurance policy, making it a simple insurance plan.
Gratuity funding
Gratuity funding can be defined as the amount payable by an employer on behalf of an employee after he or she continues the Services within the organization for more than 5 years. Group-term Life Insurance helps employers with a systematic process to support gratuity liability towards employees by helping them to get Life Insurance coverage among employees for greater benefits and smooth management.
Tax benefits and no liability
Group-term live insurance plans are beneficial for both employers and employees in terms of tax management. A group term Life Insurance purchased by an employer for employees in the form of an incentive considers the employer as a policyholder and the employees the beneficiaries. This concept provides financial independence for employees and reduces the liability of the employer by eliminating that payout if an employee dies at work.
Cost-effective
Group term life insurance is a cost-effective plan that covers the financial obligations of beneficiaries if the insured person suddenly dies within the policy term within low premium plans with greater benefits.
Role of Group Term-Life insurance in employment relationships
Group-term Life Insurance plays a significant role in improving employment relationships between employees and employers by providing a sense of security among employees with insurance benefits. Buying Group term life insurance for employees makes employers empathic and sensitive among employees, which increases individual commitment and performance for the organization.
Group life insurance provides financial security for the family members of employees by involving them in an insurance plan. Group-term Life Insurance provides financial independence for employees and the lives of family members by providing that payout in case of the sudden demise of the insured within the term.
Benefits included in Group Term-Life insurance
Group term insurance provides broad coverage benefits such as health and death benefits, medical expenses, free and post-hospitalization expenses, flight delay and loss of baggage coverage, medical evacuation, personal liability, critical illness, maternity expenses, accidental coverage, etc.
Group-term Life Insurance is an efficient and valuable insurance plan, and individuals need to determine the benefits associated with the policy to ensure the fulfillment of their unique needs. Group-term life insurance also encourages preventable care practices that support a healthy lifestyle and the mental and physical health of insureds and their family members.
Conclusion
Group-term Life Insurance is a type of insurance plan that provides financial coverage and death benefits for a specific duration. Group-term life insurance provides health coverage with the start of the policy and supports gratuity funding from employers.
This insurance plan also provides tax benefits and helps employers to reimburse their gratitude liability towards employees working in the organization for more than 5 years. It is a cost-effective insurance plan that has an important role in improving employment relationships and encouraging the healthier lives of employees working with the organization.
