Group Term Life Insurance Policy (GTLI)
Relieving your members and their families the heartening reassurance of your care. Giving your members the complete reassurance of lasting financial security and peace of mind. Here comes Group Term Life Insurance.
Any Employer-Employee groups and Non-Employer Employee groups can set-up the scheme. The purpose of setting up such a scheme is to provide your members with a sense of security in an increasingly uncertain world. The benefit is valuable because the amount available to a member’s family in the form of Gratuity, PF, or Pension, in case of premature death, is often small. This insurance balances the loss to some extent and gives the member a sense of security.
This scheme offers you the unique opportunity for providing adequate relief at a very low cost to the family of a member in the event of his/ her premature demise. The coverage may be selected:
- Uniform cover: same for all members of the group
- Graded cover: based on rank, monthly salary
- Liability amount: outstanding loan, size of bank deposit
- Future Service Gratuity of Gratuity Scheme
- Life Cover in lieu of Employee Deposit Linked Insurance (EDLI) Scheme, 1976
This Group Scheme provides basic life insurance protection to your members.
- All members of the scheme will be covered under a single policy that will be issued to you.
- The sum assured for each individual member shall be as proposed by you having reference to some justifiable factor and as agreed by the Life Insurer
- The member will have the option to choose the disbursement of the death benefit as a lump sum or partly as a lump sum and the remaining spread over the chosen period paid in equal installments.
- On the death of the member, the sum assured shall be paid as per the chosen option.
- Under joint life cover, self and spouse will be covered and the death benefit will be payable in case of the first death of either of them. Joint Life will be allowed only for the spouse.
- The scheme can be contributory or non-contributory, i.e., members and/or employer shall contribute to the premium payable with respect to the members & spouses.
- In case the member pays the premium, the member cover shall be provided for one year from the date of commencement of risk of the member else the premium shall be charged proportionately from the date of commencement of risk of the member up to the next policy anniversary.
- This is a non-participating, life, group, pure risk premium product and one-year contract, renewable by mutual consent.
You can enjoy extra coverage by choosing the optional additional rider benefits at a nominal extra cost such as – Accidental Death Benefit Rider, Accidental Permanent Total / Partial Disability Benefit Rider, Accelerated Critical Illness Benefit Rider
There are some important points to be kept in mind, for structuring the policy
- Minimum Entry Age
- Maximum Entry Age
- Minimum Sum Assured
- Maximum Sum Assured
- Free Cover Limit as applicable to Employer-Employee Group
- New Entrants Added – the date shall be well defined and in accordance with the process and along with proportionate premium, the data are normally submitted on monthly basis.
- Under the Employer – Employee Group, all new eligible members are to be compulsorily covered. Leavers – the date shall be well defined and in accordance with the process, the data are normally submitted on monthly basis.
- Suicide coverage – can be discussed and customized for Employer-Employee Group and for Non-Employer – Employee Group too.
The advantages are:
- 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.
Undoubtedly, a group insurance policy is a smarter way to avail insurance protection against multiple risk factors, let alone life. Start by assessing the right group plan.