Group life insurance policy offers you the benefits of standardized coverage as well as very competitive premium rates. You can avail of the group life insurance policies that your group takes. For this purpose, there can be the following types of groups –
As defined by the group insurance guidelines of the Insurance Regulatory and Development Authority (IRDA).
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What Is Group Life Insurance?
Group life insurance schemes (GLIS) are popular with companies as an incentive for their employees. The group can be any number and must share a commonality. For instance- the group may be company employees, players of a club, members of an association, etc. Most group life insurance plans which are available in the market are covered under.
In simple words, group insurance is an insurance package that any organization buys for the benefit of its employees. If an organization is going to get group insurance with an insurance company, then it has two options… First, it should design the kind of insurance plan it wants and second, it is prepared by the insurance company. Insurance policy can be chosen.
There are some eligible groups of group life insurance
- Professional group
- Employee – employer group
- Creditor – lender group, etc.
Employees Provident Fund Organization: It makes it mandatory for employers to offer insurance to employees under the Miscellaneous Provisions Act 1952 and EPF (Employees Provident Fund).
Types of Group Life Insurance Plan:
There are two types of group life insurance
- One is contributory and the
- Other is non-contributory
Contributory Group Life Insurance:
In a contributory group life insurance, employees pay some amount of premium policy and the employer pays the remainder of the premium. Since both employees and employers are sharing the cost of contributions, employees typically receive more coverage than personal insurance policies.
Non-Contributory Group Life Insurance:
In non-contributory group life insurance, the employee does not contribute any money; the entire premium is paid by the employer. A non-contributory scheme may not have as many covers as a contributory scheme.
Who Should Buy Group Insurance Plan?
Group insurance plans are actually affordable for the company and the employee. This is why it is a profitable deal. But cheaper personal insurance package is also definitely necessary for those who are covered by their companies. The main reason for this is that you have the freedom to choose what cover to take in a personal insurance policy or whatnot.
Under this, you can decide on the basis of the medical history of yourself and your family, for which disease you have to take the protection and for whom not. Apart from this, you can also decide how many family members to take protection, even you can decide the sum insured. In contrast, group insurance plans are designed according to the company’s policies and the will of the employer.
Also, the group insurance plan cover received by your company continues as long as you work for your employer. Whenever you change jobs, you may or may not get a health insurance cover from the new employer.
This is because it is not mandatory for your employer to give you group health insurance cover. Apart from this, you may not get as much protection from your previous employer as from the new employer.
Remember These Things Before Buying Group Life Insurance:
When you become a participant in a group policy, be aware of the following:
Only a single master plan will get issued to the executive of the group as well as it will be in the name of the group
If you contribute to the non-employer-employee group plan for the records, you have the right to obtain a certificate of insurance.
This document should contain the following information
- Cover Terms & Conditions
- Schedule of benefits and
- Premium charged
Your cover will be suspended in case you leave the insured group
At the point when you leave the gathering, the insurer should offer a continuous spread for you under an individual arrangement.
The director of the gathering ought to reveal the excellent rate and the particulars of the approach which include the top-notch limits gave to the gathering and ought to be conveyed forward to all individuals
On the off chance that the director of the gathering is charging any administrative or different expenses from the individuals notwithstanding the premium charged by the insurance organization, at that point the administrator needs to inform the entire gathering about it.
Benefits Of Group Insurance
- Group insurance is generally less expensive than individual coverage.
- This policy provides discounted coverage. This is very beneficial for a large section of people who are unable to afford individual plans.
- Employees can share costs with the employer.
- Group insurance is one of the best ways to protect employees because it makes the workforce more financially secure.
- One advantage of this policy is that the members of this group insurance scheme can have peace of mind even when they are not working.
The government or state governments can provide group insurance schemes to employees at a low cost and with the double benefit of insurance cover, to help their families in the event of a death in service and to make a lump sum payment to increase their resources for retirement. The scheme is entirely based on contributions and self-financing.
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