What Is Group Term Life Insurance? Why Is It Important and How Can You Get One?

Why are we discussing Group Term Life Insurance in India in the first place? What is Group Term Life Insurance? According to an article published by BloombergQuint, 988 million Indians are not covered by any life insurance policy. This data was collected before the pandemic, hence leading to unimaginable hardships for people across the country, financially. This has led a lot of companies to re-evaluate employee benefits and include a group term life insurance in their employee benefits. But before we dive into this solution, we must know what it is made of? Let us take a closer look. 

What is Group Term Life Insurance? 

While we have expressed the need of a group term life insurance in India, it is important to understand what it means. Group term life insurance is a type of life insurance that is available to the employee who is under the group term insurance cover for the length of his/her employment in the company. So, a company purchases a group term life insurance base as a part of their employee benefits program to provide all their employees with a sum assured against death benefit.  

What are the benefits of Group Life Insurance? 

There are two ways of looking at this question. There are of course benefits that the employee, but there are also exclusive benefits that the employer also enjoys, when he invests in a group term life insurance as a part of his employee benefits program. 

Benefits of Group Term Life Insurance for an Employer 

The main benefit of Group Term Insurance includes funding the company’s gratuity liability in comfort. 

  • Group term life insurance helps to create and grow gratuity funds, completing gratuity payments and decreasing the burden on the employer’s working capital. 
  • Also, earnings on them are based on the funds that the employer chooses. 
  •  Group term life insurance is known to be cheaper because it costs lesser to administer term life insurance in a group than individually. 

Benefits of Group Term Life Insurance for an Employee

The advantages of group term life insurance in India are based on what the employer is choosing as a package for employee benefits. But most provide death benefits which means a sum insured payable, in the case of untimely death, can be claimed by the nominated beneficiary. The sum insured is also exempt of tax in insurance under Section 10(10D) if claimed as death benefit. It can be a little overwhelming to discuss but, in the end, it does help create a backup for the concerned employee’s financial liabilities especially dependent family members. 

What is the policy term of a Group Term Life Insurance? 

The policy term of a group life insurance in India is as the length of the member’s employment with the company who is sponsoring the group term life insurance. 

How does Group Term Life Insurance work? 

Here is how a group health insurance generally works: 

  • There is group administrator who creates the master policy for the initial payments.  
  • There are options of sum insured that can chosen, to be provided to the members. 
  • This amount may be either be a lump sum amount or could be linked to salary account or a loan account, etc. 
  • Once the policyholder has made the initial payment, the members are covered for a tenure of one year from the date of commencement of the policy. 
  • Please note that most group life term insurance are annually renewable but if you choose to go for Onsurity Life care plans which includes group life term insurance for members, the payments can be done monthly. 

Where can I get access to a Group Term Life Insurance: Onsurity Life Care Plan 

Traditionally, group term life by an Employer can be taken from an IRDAI registered Life Insurance company in India which involves a lot of paperwork, timely data collection exercise and waiting for the quotation for multiple days. Further, in general circumstances of a group term life insurance you need to pay implementation a lot of paperwork is involved including a lump sum annual payment for covering the all the employees in the team.  

As an employer, for convenience, you can choose to provide LifeCare membership under Onsurity Plus to your team. If you opt to do so, the advantage for you is that the cost of the membership premium is spread over the year. Our monthly subscription model means no expensive up-front premium payments. It’s a smart way to help save on your expenses, while giving your team, employee healthcare benefits they will love.  

Further, your plan can go live on the same day as request is made if all criteria are met which saves a lot on your time and effort made in traditional way and members always enjoy much more features than just insurance.  

Onsurity has also made itself as a unique platform where if an employer chooses to pay for a combined healthcare and life care plan life insurance, the employee has access to both group health insurance plans and group life insurance in a single package with range of different healthcare benefits such as free doctor teleconsultations. This comprehensive offering as an employee benefits was never available elsewhere.  

Added Advantages of Onsurity as Facilitators of Group Term Life Insurance 

what is group term life insurance

As mentioned earlier Onsurity provides the convenience of monthly payments for the group term life insurance. As a group administrator, we will help ensure that  you have appropriate helping hand for claims paperwork your paperwork is in order. In case you are unsure of what documents you need, or how to file the claim, we have your back. We will help you through the process, and keep you updated every step of the way.   

We cannot guarantee that your claim will be approved, but we will work with insurance provider to help you know what is going on. That way, you are never confused about why your claim has been rejected.  

LifeCare is just one of the many benefits of Onsurity’s wellness membership plans. If you are a small business employer, it is important you give your team access to the best possible employee wellness benefits. With Onsurity, you can do just that, while saving up to 50% on your healthcare costs. It is the best way to thank your employees for all their hard work.   

For more details you can write to Onsurity: partners@onsurity.com