What are The Advantages of Group Life Insurance Policies?

2022-06-03

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Group life insurance policies are generally opted by professional associations, business groups, banks, and housing societies. Essentially, a group life insurance plan provides life insurance coverage benefits to a large number of people, regardless of their age, occupation, gender, and socioeconomic status. Simultaneously, the premium amount payable under a group plan is significantly lower than that for various individual life insurance plans purchased for the same number of people.

Advantage of Having a Group Life Insurance Plan

In today’s day and age, group life insurance plans have become a preferred form of life insurance protection for employees and employers alike. A group life insurance plan can provide term insurance coverage, annuity benefits, health insurance protection, and liability protection. Here are different advantages of having a group life insurance policy.

For Employees

Default Low-Cost Cover: Group life insurance plans provide affordable insurance cover to each member covered in the group. Compared to having individual life insurance plans, group life insurance policy is cost-effective and provides a default life cover to the employees, often as an incentive.
No Pre-requisites: In individual life insurance policies, the insurance company considers several factors, including lifestyle habits and medical history, before issuing it. On the other hand, there are no pre-requisites to purchase a group life insurance plan. For example, there is no pre-requisite for having a pre-medical screening in case of group plans (for up to a specific cover limit).
Hassle-free Claim Settlement Process: The claim settlement process for a group life insurance policy is usually quick and straightforward. The employee or their beneficiaries only have to submit the required documentation to initiate the claim settlement process.

For Employers

Low Premiums: Generally, the premiums payable under a group life insurance policy are paid by the employers. Instead of purchasing individual life insurance plans, employers can significantly lower their expenses by opting for group insurance plans to cover the same number of employees.
High Employee Retention: Having the protection of a group life insurance policy as incentives, employers can reduce the employee attrition rate while increasing employee retention and boosting loyalty.
High Morale Among Employees: The security and peace of mind provided under a group life insurance policy helps keep employees stress-free and enables them to focus on the essential tasks at hand.
Tax Benefits: The premiums paid towards group life insurance policies are tax-deductible under relevant sections of the income tax laws in India.

Disclaimer - This article is issued in the general public interest and meant for general information purposes only. The views expressed in this blog are solely those of the writer and do not necessarily reflect the official policy or position of Canara HSBC Life Insurance Company Limited or any affiliated entity. We make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the blog or the information, products, services, or related graphics contained in the blog for any purpose. Any reliance you place on such information is therefore strictly at your own risk. You should consult with a qualified professional regarding your specific circumstances before taking any action based on the content provided herein.

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