How Group Life Insurance is Beneficial for Both Employees and Employers?
Published On Mar 30, 2023 10:55 AM By InsuranceDekho
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In today’s time when most of us prefer a hybrid model of work, it has become extremely challenging for organisations/employers to retain employees. It is very important for employers that employees feel connected to their organisation and for the same, many employers now offer additional perks to their employees. One of the most effective ways to do so is to offer group life insurance plans to their employees. A plan like a group life insurance does not just make employees feel that the company cares for them but also secures their well-being. So, read on to understand how group life insurance is beneficial for both employees and employers.
What is a Group Life Insurance Plan?
As the name suggests, a group life insurance plan is basically a type of life insurance policy that provides life insurance coverage to a group of employees. With the help of the group life insurance plan, the employees of that particular organisation are given life insurance benefits under one group plan irrespective of their age, gender, and more. Moreover, it is important to understand that group life insurance plans are different from individual life insurance plans as only one plan is needed for all the employees of the organisation.
Requirements for Group Life Insurance Plans
While all the employees are eligible for getting group life insurance plans. Yet, there are many companies that have a definite period after which employees can get the benefit of a group life insurance plan. In most cases, employees need to fulfil the probation period to become an eligible member of the group life insurance plan. The probation period varies from one company to another. Thus, you must check with your employer whether you are eligible for getting the benefit of a group life insurance plan or not.
Benefits of Group Life Insurance Plan for Employers
Listed below are the benefits of a group life insurance plan for employers:
- Cost-effective: A group life insurance plan is beneficial for employers as it is extremely cost-effective. This is because life insurance coverage benefits are offered to all employees of the same ogranisation under one plan, rather than buying individual life insurance plans for all.
- Time-saving process: On buying a group life insurance plan, it becomes easier for employees to buy one master plan for all. Buying a group life insurance plan also saves their time and effort.
- Reduces attrition rates: Nowadays, many employees feel disconnected from their company and this is one of the reasons why they resign. However, with group life insurance plans, employers can ensure that they care for their employees and are thus offering group life insurance plans. This in turn helps them reduce attrition rates and maintain their workforce.
- High productivity levels: On knowing that the company is offering them life insurance protection benefits, employees feel stress-free and are able to focus more on work. This in turn increases their productivity and thus benefits the employer.
- Tax benefits: A group life insurance plan also offers tax benefits to employers. The tax benefits are provided on the premium paid towards the group life insurance plans.
- Retaining brand value: By offering additional benefits of group life insurance plans, it becomes easier for employers to appreciate their brand value.
Benefits of Group Life Insurance Plan for Employees
Just like life group life insurance employees are beneficial for employers, similarly, it is also advantageous for employees. Listed below are the benefits of group life insurance plans for employees:
- Ensures high motivation levels: With group life insurance plans, an employee feels more motivated. With greater motivation, an employee does the best work for the benefit of the company.
- Provides life insurance coverage: There are many individuals who cannot afford standalone life insurance plans. In such a case, a group life insurance plan becomes beneficial in providing employees with group life insurance plans at affordable premiums. Moreover, employees can even add their dependent family members to group life insurance plans at a very affordable premium.
- Easy payment option: The premium for group life insurance plans is automatically deducted from the bank account of employees. This reduces the employee's effort and time in paying the premium as well as helps them in paying the premiums on time.
- No prerequisites: There are no prerequisites needed when employees are buying life insurance plans. Unlike individual life insurance plans that take several factors into account such as age, lifestyle habits, and more, there are no such conditions or prerequisites when offering group life insurance plans.
- Tax savings: A group life insurance plan also offers tax benefits to the employees. Under section 10(10D) of the Income Tax Act, tax benefits are offered to employees on the death benefits.
- Easier claim settlement process: The claim settlement process of group life insurance plans are easier and quite straightforward. You just need to submit a few documents and get your life insurance claim settled in a hassle-free manner.
Thus, it can be said that group life insurance plans are beneficial for both employees and employers. So, you must check with your company whether they are offering group life insurance plans or not.
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