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Who is eligible for group term life insurance policies?

Saturday, October 22, 2022

Group term life insurance is a type of term life insurance which is offered to a group of people under a single master policy. Any employee-employer relation can take the group term life insurance plan. Non-banking financial companies, banking companies, industries, software companies, microfinance institutions, startup companies, schools and colleges etc can take the group term life insurance policies.

 

Group term life insurance policy can be taken by formal groups such as employer-employee relation groups and informal groups such as non-employer-employee groups which are generally associations etc. The group term life insurance plan would be taken by the employer and the benefits would be claimed by the employees. Visit here. https://www.ethika.co.in/group-term-life/


Any organization coming under a formal group with employer-employee relation and having at least 10 members in the group is eligible to take the group term life insurance policies. Informal groups with non-employee-employer relation having 50 members can avail the group term life insurance policy. Group term life insurance is not as expensive as individual term life insurance policy. Group term life insurance is usually taken for a period of 1 year after which it is renewed every year whereas the individual term life insurance is taken for more than 2 years. The minimum entry age under group health insurance plans is 18 years and the maximum entry age under the group health insurance plan is 70 years and it varies from one insurance company to another. 


Group term life insurance provides compensation to the members in case of death of the employee during the course of employment. The compensation would be payable to the nominee of the employee in case of death of the employee due to any of the reasons mentioned under the policy. There would be no premedical tests to take the group term life insurance plans and the coverage would be available from day 1. Group term life insurance policy can be contributory as well as non-contributory where the premium would either be paid by the employer or the employees. In case of contributory policy, the premium is shared by the employee and the employer whereas in case of non-contributory the entire premium would be paid by the employer. 


The premium under the group term life insurance plan depends on the age of the members, sum assured opted by the members, location etc. Group term life insurance policy can also be taken with the critical illness policy. The group term life insurance policy can be taken in flat cover where a single sum insured would be given to all the members or in graded cover where different sum insured can be taken for different employees. The graded cover would be given according to the hierarchy levels of the organization. The premium paid would be more in case of the high sum insured opted by the employer. The basis for calculation of sum assured or coverage is determined by the salary of the employee where the salary is multiplied by a factor determined by the insurance company. 

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