Benefits of Group Term Life Insurance Policy

If you are an employer, providing insurance coverage to your employees becomes an absolute necessity so that in the unfortunate case of their demise, their family is financially secure. Here comes group term life insurance.

Unlike individual life insurance policies, group term life insurance is offered as a collective benefit. Whether you are an employer considering offering group term life insurance or an employee seeking to understand the advantages it offers, this article will provide valuable insights into the benefits of this form of life insurance coverage.

A Group Term Life Insurance is a type of insurance plan wherein a single policy covers a group of individuals. It is usually taken by employers providing life coverage to their employees wherein the Sum Assured is paid to the nominee in case of the unfortunate demise of the employee during the policy term.  However, it can be taken by other affinity groups also.

Most employers prefer Group Term Insurance over Individual Term Insurance to provide financial security to the kin of their staff. The foremost reason is its cost-effectiveness over individual term insurance policies.

1. Hyper Customisability

• Get built-in optional benefits like Accidental Death Benefit, Terminal Illness Benefit, Critical Illness Benefit, and more.
• Add on benefits like Spouse Cover that provides coverage to the spouse of the member or Voluntary Insurance Coverage that provides financial support for various expenses like funeral, credit card outstanding or child education.
• Provides different options for death benefit payout: lump sum or regular income. The regular income option further offers 3 choices for receiving the death benefit. It can be paid up to the insured's retirement age, the child's certain age, or a certain selected time.

2. Tech-Enabled, Smooth Processes

• Minimal and online documentation makes our processes hassle-free.
• 72 hrs claim settlement with our super smooth processes.
• Worldwide coverage if your group company is based in India.
• No medical check is needed in 99% of cases.
• There is no Active at Work clause for renewals.

3. Aligned with Your Business

• By choosing the regular pay option, you can secure a premium lock for up to 3 years, providing stability and predictability in your financial planning.
• In favorable claims or long-term contracts, a part of the premium is refunded to the master policyholder, fostering a sense of partnership and profit sharing.
• The flexibility to choose your premium payment frequency, whether annual, half-yearly, quarterly, or monthly, enables you to manage your cash flow efficiently.

• Shows Genuine Employee Care: Opting for this plan demonstrates your commitment to employee well-being, not just in their careers but in their personal lives, fostering deeper trust and loyalty.
• Valuable Benefit with Easy Implementation: This plan offers a high-value employee benefit that’s simple to set up and manage, minimizing administrative burdens while maximizing the value of your benefits package.
• Grows with Your Business: As your company expands, this plan scales effortlessly, ensuring you can continue providing life insurance coverage without restructuring your benefits program.
• Enhances Recruitment and Retention: In today’s competitive job market, offering a solid group life insurance policy positions you as an employer that values its workforce, making it easier to attract and retain top talent.
• Peace of Mind Without Complications: Employees receive immediate peace of mind, knowing they and their families are protected, without the complexity of navigating the insurance market independently.
• Direct Financial Security for Families: This plan goes beyond workplace perks by providing crucial financial security to employees' families in the event of an unexpected loss, ensuring long-term reassurance.
• Hassle-Free Coverage: Employees enjoy protection without needing medical checks or tedious paperwork, making it a simple and convenient solution for their insurance needs.
• Sign of Employer Commitment: Access to this plan is more than just a financial benefit; it clearly indicates that the company values its employees' future and makes them feel appreciated and secure.

The Digit Group Term Life Insurance policy offers several optional riders and features that enhance coverage for insured members. Below are the additional riders and features available:

• Additional Accidental Total & Permanent Disability Benefit: This rider provides extra coverage specifically for total and permanent disability caused by an accident.
• Additional Critical Illness Benefit: This option offers further coverage for critical illnesses beyond the standard benefits included in the policy.
  
• Accelerated Critical Illness Benefit: With this feature, members can receive an early payout of the critical illness benefit upon being diagnosed with a covered critical illness.
• Spouse Cover: This extends insurance coverage to the spouses of members, although it is subject to underwriting and may require additional premium payments.
• Voluntary Insurance Coverage: Members can purchase additional voluntary coverage, which is also subject to underwriting and an extra premium.
• Profit Sharing Option: If specified in the Master Policy Schedule, this option allows for profit sharing based on favorable claims experience.
• Wellness Benefit Program: This incentive program encourages insured members to maintain a healthy lifestyle by providing access to various wellness services.

Tax Benefits for Employers

Tax Benefits for Employees

1. Premiums Paid by Employer:

If the employer pays premiums up to ₹50,000, this amount is not taxable for the employee.

However, if the premium exceeds ₹50,000, the excess is treated as a taxable perquisite, meaning it gets added to the employee’s taxable income.

2. Death Benefit:

Any payout received by the nominee as a death benefit is fully exempt from tax under Section 10(10D) of the Income Tax Act.

3. Supplemental Coverage:

If employees opt for additional coverage by paying premiums themselves, they can claim tax deductions under Section 80C for the premiums paid.

Group term life insurance is a powerful way to protect employees financially while offering employers a cost-effective, morale-boosting benefit. Its affordability, ease of implementation, and tax advantages make it an appealing choice for businesses looking to support their workforce. For employees, it brings peace of mind, knowing that their loved ones are cared for without the need for complicated enrollment processes or medical exams. 

As a flexible solution, it can be tailored to meet individual needs, making it an intelligent and thoughtful addition to any company’s benefits package. Choosing a reliable plan like Digit Life’s ensures that the employer and the employee are well-protected, with the added benefit of simplicity and customization.