As the name suggests, it is designed to offer life insurance to a group of people under a single policy.
A group insurance policy is not restricted to merely employer-employee groups but is also extended to other groups such as customers of banks, non-banking financial institutions, microfinance institutions, professional groups, trade and association, societies, NGOs, and the like.
A group insurance policy for employees/members assures financial assistance and independence to the beneficiaries of the concerned employee/members in the event of his or her death.
Default Insurance Cover – provides insurance cover to members by simply being part of the group. It ensures basic insurance to cover those who do not have a personal life insurance policy.
It can be customized with riders like Accidental Death, Accidental Permanent Total / Partial Disability Benefit, etc.
Under the Employer-Employee Group, employees are relieved from the hassle of going through pre-policy medical check-ups.
Since a group plan entails insurance cover for many people, the premium is much lower as compared to individual policies.
It offers worldwide coverage to policyholders. Even if the insured dies in a foreign land, the nominee is entitled to receive the policy payout benefits in India.
It offers tax benefits to both employers and employees. As per prevailing tax laws, the death benefits to employees are exempt from tax under Section 10 (10D), Income Tax Act, 1961. For an employer, the premium is an allowable expense.
Moreover, group insurance plans are doubly effective – in employee welfare as well as for their retention.