GROUP TERM INSURANCE PLANS
HOW DOES THIS PLAN WORK?
This plan is offered through a Master Policy that is issued to you. As the Master Policyholder or the group administrator, you pay premiums that cover the members of your group.
How will the member’s nominee receive the Sum Assured?
As the Master Policyholder, you can choose the Sum Assured that will be provided to the member’s nominee*. It can either be a flat or graded cover amount. When all members of the group have the same Life Cover, it is called the flat cover. On the other hand, when different individuals are offered different Life Cover based on pre-decided grades, it is known as a graded cover.
In the case of formal groups, this Sum Assured amount can also be linked to loan amounts, other financial liabilities or even the employee’s salary. When linked to the salary, the Life Cover amount is equal to a multiple of the annual salary. For example, if a member has an annual salary of 10,00,000 and the multiple considered is 2, then his Life Cover amount will be 20,00,000.
*Nominee is the person who will receive the Life Cover amount in the absence of the member.
BENIFITS
For Employer
- Life cover for all the group members under one policy.
- Easy and hassle free financial help to the employee's family, in case of an unfortunate event
- Cost-effective method to buy a high cover at a low premium
- GTI cover for future service gratuity liability
- Serves as strong retention tool
- Premiums paid by the employer is tax deductible u/s 37 (1) of the Income Tax Act, 1961
- Simple procedures for addition and deletion of members in to the policy
For Employee
- Adequate financial support to loved ones against his accident, illness or untimely death
- Convenience of no medical tests till free cover limits
- Cover for housing or vehicle loans given by you to your employees
- Premiums paid by the employer not treated as perquisite
- Death benefits exempt from tax under Section 10(10D)