As the name suggests, group insurance policy is designed to provide life insurance cover to a group of people under a single master plan. Group plans can be taken by any number of people, big or small, who can come together for any reason. Group insurance policies are generally undertaken by groups of people such as employers, co-workers, professionals, cooperative societies and certain weaker sections of society.
The prime reason why group plans exist is that they provide insurance cover to those sections of the society that may otherwise not be able to afford individual insurance policies. In most cases, group insurance policies can be modified to meet the specific requirements of the targeted groups of people. These policies provide insurance cover to all, irrespective of their age, gender, socio-economic background as long as they belong to the particular group belonging to a specific employer. When it comes to group insurance, there are plenty of amazing benefits associated with it such as:-
Low premium costs: - The premium of a group insurance policy is generally much lower than the comthat of individual insurance policies. Nonetheless the premium depends on various factors such as professional hazards, average group etc. The group insurance policy that has the lowest premium on every lakh of the cover provided, is the one year renewable term insurance plan.
Beneficial for Employers: - In India, the employers require at least 25 members to opt for a group insurance scheme. It is highly beneficial to employers as all the payments made by the employer towards the contribution of group insurance is considered as business expense and not as profits. This in turn results in tax savings for the company.
Cover for life: - nearly all of the group plans in India provide automatic life insurance cover to all the members of the group of an organization as long as they are associated with it. This is especially beneficial for those members who cannot afford individual life cover through separate policies.
Easy to pay: - As the premium is deducted directly from the salary of the employees, there is no additional hassle involved in paying the premium. And the chances of missing the payment is zero.
Annual leave encashment by employees: - Under leave encashment benefit, the leave balance can be encashed by the employees at the end of the financial year.