Life insurance is a very nice option available to the people who desire to obtain a certain financial security for their family, in the event of his or her demise. With different types of Life insurances that have sprung up in the recent past, there has come one more which stands out from the rest. Group Life insurance policy is essentially a life insurance only, with the crucial distinction that it covers a “group” of people against whose death, such financial protection is provided to their beneficiaries. One of the reasons it has not grown very popular, though, is because the people have not really understood the importance of its features and benefits properly. Group Life Insurance benefits can be amazing. All one has to do is get better guidance and proper information about the relevant aspects of the same.
Group Life insurance benefits are provided to large groups as the coverage extends to a group of people. This kind of insurance has been adopted by various employers and organizations to decorate their package offers to the employees. In this policy, a single contract is signed between the Insurance provider and an employer (or an organization) for the provision of Life insurance for the members or employees of such employer. The employer or organization is the Policyholder in this type of insurance. These policies are mostly subscribed in workplaces, labour associations, or other homogenous groups, etc.
Despite being a form of Life Insurance, people are not supposed to count it towards their own financial arrangements, like their own regular policy, however, most people end up making this mistake nonetheless. This might lead them to splurge over their budget and this will cause further complications and what not! But this doesn’t mean that Group Life Insurance is not beneficial or anything. In fact, Group Insurance Policies offer only a wider array of facilities than the traditional Life Insurance Policies, no matter how small the difference between the two is. The following are some advantages or benefits of the Group Life Insurance Policy:
- No Requirement for Medical Check-ups
One of the most popular things considered a burden while buying various type of health or life insurance policies is the requirement of Medical check-ups that the potential policy holder is to undergo or someone for whom the insurance is being taken, has to undergo.
Such a requirement doesn’t exist at all in Group Life Insurance Policies. One doesn’t need to appear for a Medical Check-up to be covered under the Group Life insurance policy because the Group Life Insurance taken by the Employer automatically covers any employee which joins the organization subsequently.
- A good mode of savings to the Employer.
Since the Insurance cover is bought for a large sized group, it is provided to the Employers or Organizations at a concise rate as compared to the regular Life Insurance Policies. This makes it very easy for even those who couldn’t otherwise afford a Life insurance policy, to acquire such a cover.
Apart from that, it becomes a two in one plan that ensures Employee Welfare, as well as the purpose of Employee Retention. Such organizations include these Life insurance covers in the Salary packages for the employees, thereby sometimes also cutting down on the in-hand salary marginally to accommodate this feature. The premium costs are calculated with regard to the risk factor in the nature of the work involved in such establishment. High risk based work leads to a higher premium and vice versa.
- Tax Benefits
Employees and Employers both become entitled to getting tax benefits on account of Group Life Insurance Plans.
- Extension to Family of the Members.
It is also possible that some plans extend this coverage to the family members.
- Affordable and Pocket-friendly to both Employers and Employees.
The Group Insurance Policy may be paid for entirely by the purchasing employer or may be split between the employer and employees in a certain ratio. The premium that employees have to pay is usually already deducted from their salaries. Even in the latter case, the policy ends up becoming a whopping 30-35% cheaper than the regular Life Insurance Policies.
What to watch out for?
Despite the numerous Group Life Insurance benefits mentioned, it will be prudent of you to take care of certain shortcomings to take the necessary steps in order to ensure maximum benefits.
- Termination of Benefits to ex-employees.
The benefits enjoyed under the cover of this policy cease to exist once the employee leaves the organization.
- Limited cover granted.
The sums which are assured via the Group life Insurance benefits are not as high as the regular ones since obviously, it is being provided in respect of numerous people. Therefore, an employee might need some sort of additional cover, usually via a separate life insurance policy, to ensure complete protection to the family.
Weighing the pros and the cons, you can form a well-informed opinion, based on factual knowledge provided above on the issue of Group Life insurance and depending upon your role as the Member of an organization or the Employer, you can proceed ahead. Rest assured, it is a very effective and efficient mode of providing financial security to your members and employees and Finbucket can make it very simple for you.