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What are the Benefits of Group Term Life Insurance Plans?

Updated On May 19, 2021

Companies worldwide are faced with this one mutual problem – workforce turnover. For certain businesses, talent is a precious asset that is more difficult to find and maintain in their organizations, considering the continually evolving labour market. Talented workers, too, are mindful of the importance of their work skills and the resources that can be leveraged for more excellent pay and benefits. 

It is also in the organization's best interests to attract talented workers who work well and entitle them to such extra rewards that will keep them satisfied and inspired. Employee term life insurance also referred to as group term life insurance, Is one such mutually advantageous relationship between the boss and the employee that is increasingly gaining popularity as the chosen form of employee retention.

What is a Group Term Insurance Plan?

Group Term Life Insurance scheme refers to insurance coverage that is given to a group of individuals. Group life insurance plans provide financial independence to the families of the employee involved in the case of demise. It is meant to offer a financial guarantee to the survivor affected by the community life insurance scheme in the insured's death. Group life insurance policies have been a central component of the compensation programmes offered to workers by employers. In reality, most fraternal providers provide group life insurance to their members. Life insurance is an essential commodity for those who are financially dependent.

Benefits of Group Term Insurance Plans

Its increasing success among significant companies indicates the broad coverage and services it offers at competitive rates. Employers and employers will benefit from the programme they have purchased. Here are several opportunities that can be made available:

  • Default Insurance Cover

    Group insurance plan provides insurance benefits to members by merely being part of the group. It offers essential services to those who do not have a personal life insurance policy.
  • Gratuity Funding

    Employers are assisted by a systemic system of building up reserves for a potential gratuitous liability to workers. A group insurance plan supports workers in the same manner and supplies staff with life insurance benefits, with greater convenience.

You may also like to read:- How Much Term Life Insurance Cover Do I Need?

  • Tax Benefits

    Group Term Life Insurance plans provide all employers and workers with tax incentives. As per the tax laws in force, death benefits are excluded from tax under Section 10(10D) of the Income Tax Act, 1961. In comparison, group insurance policies are doubly successful – both in terms of staff wellbeing and longevity.
  • Coverage Flexibility

    Group insurance coverage will be expanded with extra advantages such as education allowance, repatriation allowance, accidental death and more, thereby covering a variety of benefits along with basic coverage.
  • No Medical Checkups

    Employees are free of the difficulty of going to hospital check-ups under Group Term Insurance Policies.
  • Cost-Effective

    As a group plan requires health coverage for multiple individuals, the premium is much cheaper than that for individual plans.

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Employee/Group life insurance plans are appropriate for employers or companies who plan to have monthly insurance for their families. The future and success of an organization lie in the hands of its workers and their job results. Offering them life insurance benefits helps them feel valuable and comfortable in the shade of specific employers/organizations who take care of them.

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.        

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