Requirements for Group Life Insurance
The majority of group life insurance policies come with certain conditions. Before receiving coverage, several organizations need group members to participate for a certain amount of time. For example, before being authorized to participate in employee health and life insurance benefits, an employee may be required to complete a probationary period.
Coverage is usually only good for as long as a member is a member of the organization. When a member leaves, whether by resignation or termination, the coverage ends.
Benefits of Group Life Insurance for Employers
Group life insurance policies are as beneficial for employers as they are for employees. Some of these benefits include :
- Group life insurance plans make it easier for employers to fund their gratuity liability. Gratuity funds are specifically designed to cover future gratuity payments, alleviating the pressure on the employer.
- The returns on funds collected are based on the success of the client-selected funds.
- Group life insurance plans are more affordable than individual life insurance policies since running schemes on a group basis is less expensive.
- Some plans offer both, life, and disability benefits to the employees.
- Employers can earn tax benefits on group insurance premiums.
- In larger organisations, group life insurance plans also serve as an added employee benefit and help in employee retention.
Benefits of Group Life Insurance for Employees
Default Insurance Coverage for All Group Members
Being a member of a group might provide life insurance coverage to an individual. For example, when new employees start working, they are automatically added to the company's group insurance plan. This is a huge benefit for people who don't have their own life insurance coverage.
No Medical Examinations Required
Employees are not required to undergo a medical examination in order to participate in the group life plan. Individual medical examinations for each employee are no longer necessary.
Employees and corporations both benefit from group plans in terms of tax savings. The Internal Revenue Code's section 10(10D) exempts death benefits provided to employees via group term life insurance.
One of the most major advantages of group plans is this. Because a large number of people are covered under a single insurance, administrative expenses are reduced, and premiums are reduced as a result.
Most group life insurance policies, in general, provide worldwide coverage. For example, if the insured dies while travelling abroad, the policy's benefits will be paid to the nominee in India.
Group life insurance policies are beneficial for both parties. They double up as an effective employee benefit and therefore improves the employer-employee relationship.